Does social media influence politics?

The new fashion in Australian politics seems to be leadership change. In the past ten years, we’ve seen Rudd overthrown by Gillard (only to succeed in a subsequent challenge a couple of years later), three federal opposition leaders in the Rudd/Gillard government era, the overthrow of a Victorian premier and subsequent election loss, two or maybe three leadership spills in the NT, and a Queensland premier suffer a thumping loss at an election. Political life seems to be a lot more unsettled now than it was in the late 1960s and early 1970s.

So, what would happen if Holt, Gorton and McMahon were reincarnated and chose to be politicians in the ‘twenty-teens’? How would they cope with the constant news cycle where any mug (this one included) can write a blog, send a tweet or post on social media and have a chance that it will be noticed and assumed to be ‘the truth’?

Technology is an amazing thing. Children today just ’don’t get’ the miracle of Instant Messaging, ringing people outside the same ‘zone’ and the ability to gain information on practically any subject on a device you hold in your hand. In the days of Holt, Gorton and McMahon, as there is today, there was a press gallery in the Federal Parliament House. The difference is that ‘back in the day’, the press gallery members were the only ones who had ready access to the political players of the day. Today, it is somewhat expected that political parties, politicians and members of the press gallery all maintain social media accounts, where should you feel the need or desire, you can read the infinite wisdom of the politician or reporter of your choice as it leaves their keyboard.

It is clear that political intrigue occurred in the past — otherwise the term wouldn’t be in common use. History tells us that Billy Hughes and Sir Robert Menzies were prime ministers while representing different parties at different times. The ALP split into two different organisations during the 1950s. In addition, John Gorton effectively ended his prime ministership when he voted against himself in a leadership vote in 1971.

Whitlam became leader of the opposition during the short reign of Prime Minister Holt (who vanished at sea off Cheviot Beach in Victoria). He was far younger than his predecessor Arthur Caldwell (1966 election campaign advertising clip here) and set about modernizing the ALP. By the 1972 election McMahon was prime minister. McMahon’s 1972 policy speech is an earnest appeal for votes but demonstrates how totally unprepared he was for the emergence of the ‘It’s timecampaign of the ALP led by Whitlam. Like Newman in Queensland 40 years later, Whitlam managed to alienate a significant section of the community in three years. The Liberal Party had developed a pale imitation of ‘It’s Time’ for the 1975 federal election, using the slogan ‘Turn on the lights’ with associated campaign material for the successful campaign to elect Malcolm Fraser. Since then, the marketing of our politicians and politics has only intensified. During the ’80s, Hawke and Keating announced proposed changes to the Australian taxation system prior to the 1984 election and promised to hold a summit to discuss the policy and its implementation after the election. The ‘tax summit’ was held in July 1985.

By the time the GST was introduced in 2000, the campaign had moved to television advertising. The internet was still young in 2000 and ‘social’ media was the ‘women’s section’ of the paper where the latest fashions and who was at the latest elite society party were the general subjects for discussion.

In the past 15 years, there has been a significant shift in the technology available to society. Social media is now considered to be a number of computer applications where anyone can write, discuss ideas and discuss issues relevant to them. Generally known as the ‘fifth estate’, social media (such as this blog, Instagram and similar platforms) gives people without any qualifications as a journalist the ability to discuss current issues and express opinions — potentially to a large audience. Traditional media (the ‘fourth estate’) has responded by creating websites that mirror the content of their existing publication — be it newsprint or electronic media — available through the internet for instant access (usually) wherever you are in the world. In addition, 24 hour news channels have been created such as Aljazeera, CNN and ABC News 24. Nature abhors a vacuum, so there has to be content for all these additional ‘instantaneous’ news channels. Those in the ‘fourth estate’ — some would argue attempting to retain their relevance — now seem to grab every opportunity to quickly publish on their organisation’s website any small piece of information they discover, only to be analysed and discussed by others and then republished.

It is clear that today’s political leaders have more training in how to behave in front of the media than Arthur Caldwell and Sir William McMahon did. Although being in the lifetime of a considerable percentage of the population, Caldwell and McMahon’s wooden delivery seem rather old fashioned today.

None of our three examples were examples of classical beauty. Holt looked his age, Gorton carried the reminders of a nasty accident when a pilot in World War 2 while McMahon was somewhat unkindly referred to as a VW Beetle with the doors open — matched with a crackly high-pitched voice. In contrast, more recent prime ministers, such as Julia Gillard have been subject to discussion of their looks, fashion sense and living arrangements, as well as their physical appearance. It should be said that looks, living arrangements and so on do not in any way determine the quality of decisions made in a leadership position.

We discussed above that you don’t have to be ‘in the media’ to make your opinion known. There are various social media sites that openly publicise their political beliefs (including The Political Sword, The Hoopla as well as the Don’t blame me I didn’t vote for Tony Abbott, a Facebook page). There are a number of equally blatantly conservative political Facebook and internet sites around — ‘search’ is your friend.

In the recent Queensland election campaign, various people and groups took to social media to attempt to influence the vote. It is fair to say that, in addition to the political parties, mining companies, unions and other interest groups all bought advertising on established media as well as social media websites to advance their respective positions. Others such as Dr David Pascoe created Facebook pages to discuss their individual views and by doing so they attempted to influence others. Pascoe somehow promoted an alliance between Alan Jones (2GB announcer), Katter’s United political party and Peter Wellington, independent MP for the Queensland seat of Nicklin, and made a number of posts critical of former Premier Newman and the state’s LNP for his alleged closeness to mining companies while ignoring primary production. While no one will ever know if Pascoe’s Facebook page affected the outcome of the election, he claims he has influenced large companies in their business dealings with their customers here and here — both ironically reported in a newspaper. Pascoe continued his crusade against coal seam gas development by commenting on the New South Wales state election.

Cathy McGowan is the independent federal MP for Indi. She won the seat — a conservative ‘stronghold’ — in 2013. In fact, Indi was the only Coalition loss at the 2013 election. ABC journalist Barrie Cassidy wrote a piece on The Drum describing the process. Cassidy’s article demonstrates social media played a large part in the organisation of the group, and McGowan’s win.

Holt, Gorton and McMahon were intelligent people and rose to the leadership level of a political organisation, so they knew how to ‘play the game’. In the days of media and image management, paid for by the political parties, their images could have been cultivated to make them ‘acceptable’ for the TV news sound bite. The major difference probably is that they wouldn’t have the luxury of reading the morning papers, crafting a message for broadcast that afternoon and moving on, only needing to interact with the established press gallery. The press gallery would have also respected ‘the rules’ and not led discussions on leadership spills and the like, realising that their access might be restricted if they did.

Has the rise of social media made it harder for politicians? In all probability it has because, while they still have the ability to ‘craft’ a message, any personal, private or public misstep is reported. They also have to be ‘on top of the game’ 24 hours a day, as once the audio and footage has been transmitted back to the base or someone has posted an event on Facebook or Twitter, it is out there, without the ability to ask for the story to be corrected or retracted. The public will no longer accept a speech from a politician sitting behind a desk looking authoritarian and like the protector of all they can see. Australian prime ministers for a decade or so now have been walking out to the podium in the courtyard at Parliament House in response.

It seems that social media has influenced politics. Dr David Pascoe and Cathy McGowan would certainly argue in the affirmative. Politicians now have to attempt to make the news, not be the news, while crafting a message and delivering it on cue and accurately. While they are doing that they have to seem to be relevant and responsive to their communities. The alternative is losing the leadership or, even worse, the election.

What do you think?

Postscript: You could also ask if Holt, Gorton and McMahon would be happy to be members of Abbott’s ultra-conservative Liberal Party — after all, former Prime Minister Fraser has resigned from the Liberal Party. That is another discussion entirely.

About 2353

This week 2353 asks whether social media and the fifth estate influence politics. Well, you are here reading this, so perhaps you can answer the question. Please leave a comment.

Next week Ken will take a look at the Intergenerational Reports, not just the recent one released by Hockey but the four that have been put out since 2002.

Surprise, surprise …

Not very long ago, during the annual meltdown into the pleasantly torpid stasis that is the great Aussie January holiday time, Peter van Onselen zapped out this Tweet:

From van Onselen, that was quite, well, shocking. More especially because just two days before he had tweeted:

Peter van Onselen…@vanOnselenP

The way the government has kept faith with voters up until now should give them the political capital they need to sell the Medicare cuts... 13 January 2015

While the Tweeps suggested he was in ‘irony font’ with that one (no, I don’t believe ‘PvO’ can ‘do’ irony either), in between the two tweets, Peter had dashed off a few others:

Peter van Onselen @vanOnselenP Jan 13

The govt start 2015 with a move putting the focus on health...consistently polled as a Labor strength. Plus the new minister is on holidays

Peter van Onselen @vanOnselenP Jan 14

What is wrong with this government, it is like watching a circus...

Peter van Onselen @vanOnselenP Jan 14

Yesterday the PM was explaining why the Medicare rebate cut is necessary, today they are backing down on it. They are SO incompetent...

Peter van Onselen @vanOnselenP Jan 14

Me: "what's going on?" (re Medicare rebate). Liberal MP: "How would I know, I'm only a minister". Adults in charge...

And two days after his ‘concern’ that he hadn’t made his apparent position on the government ‘clear’, came these:

Peter van Onselen @vanOnselen Jan 17

Yep this is what happened. Others didn't want to make the damaging change, PM insisted. He was warned, didn't listen.

Peter van Onselen @vanOnselenP Jan 17

There is a staggering amount of discontent with the PM amongst his colleagues. Day one back at work and hitting the phones...not pretty!

There’s general agreement in the Twitterverse, at least from more progressively minded Tweeps, that van Onselen is the weathervane, the cut-tin mainstream media rooster perched on the roof peak of Australia’s fourth-estate political commentary. Indeed, van Onselen oscillates on his rooftop so rapidly that it seems the only way to determine his ‘speaking position’ is unfailingly to remind ourselves of upon whose rooftop he roosts (Rupert’s of course: Sky, The Australian, the Sunday Times).

Take a look, though, at just a few of the columns van Onselen had written for The Australian during December and January and one just might suspect that van Onselen had ‘turned’:

    • December 3, 2014 ‘Respect the only answer for Abbott’: ‘Only a popular and well respected prime minister can mount a recovery for the government now, given the dire state of the polls.’
    • December 13, 2014 ‘Peta Credlin has become the story and that’s bad news for Tony Abbott’: ‘The volunteer firefighter, surf lifesaver and pollie pedalling fundraiser, who could almost always win over anyone he met, now seems to be living in a prime ministerial bubble …’
    • December 23, 201: ‘Tony Abbott’s reshuffle a rebuke for Julie Bishop’: ‘The Bishop slight within Abbott’s reshuffle didn’t end there ... Make no mistake, this was a deeply politically calculated and calibrated reshuffle …’
Well, almost suspect a turning — until you read this consummate bit of van Onselen sleight-of-hand: ‘ALP needs big-picture manifesto, not small-target strategy’, which, along with his sage advice to the ALP, includes these kinds of statements:

However dysfunctional Abbott’s team has been and continues to be, it pales into insignificance alongside what occurred under Rudd-Gillard-Rudd …

Bowen’s knowledge of financial issues and governance combined with Leigh’s outside-the-box thinking just might lift Labor’s economic credibility …

Really? Pales into insignificance?

Really? Lift Labor’s economic credibility? Not evidenced-based statements, these.

Van Onselen has been, and I think still is, a cake-and-eat-it academic who plays at journalism, or perhaps vice versa. His journalism, so-called, has always been and remains biased towards the LNP and its ideology, positions and policies. But he writes and speaks from a pose of academic distance. This translates into the false-prophet scourge of political journalism today — assuming that a position of so-called journalistic objectivity is achieved by putting the all-omnipotent boot into one’s own side, when perceived as needed, while measuring out in teaspoonfuls sage advice on how that home side can improve. Like the prime minister whose advisor he once was (when Abbott was Workplace Relations Minister in the Howard government), van Onselen is, while taking on the role of providing professional and fair reportage or commentary, the spinning weathercock incapable of offering his own political position for scrutiny, incapable of acknowledging that he is, indeed and inevitably, partisan. And that way reader distrust must inevitably lie.

Van Onselen’s almost naive posture of objective commentary could never hide his inevitable, default-position wish for a successful conservative government — even though he’s been pretty busy throwing Tony under a bus for quite some months. No, van Onselen hasn’t turned, but like a number of the fourth estate who gave Abbott and the LNP an unexamined free ride into power and the people a federal government not worth the examining, let alone the living with, he seems, variously of course, open-mouthed in surprise at what collusion in deceiving a citizenry and changing a government has wrought and, apparently, he has been fearful enough to show it. But not responsible, of course. Never that.

The 19th of January this year marked the 500th day of the Abbottian era of federal politics and political journalism.

While Peter van Onselen was spinning away, how have other political journalists fared in the now 500-plus days? In Peter Hartcher and Mark Kenny — two Fairfax journalists who in this first half of the Abbottian reign assumed that a calm, consistent, steady and above all ‘adult’ period of governance had been ushered in on the 7th September 2013 — we can spy a reluctant shift becoming more emphatic over time.


In ‘Abbott’s in, now what?’ (November 30 2013):

The Abbott government has been quietly putting in place processes for a substantial agenda of economic reform. But none of that is yet showing results. In the interim, the news is full of Abbott's poorly managed events and Pyne's broken promise.

His government wants Australians to go to their Boxing Day barbecues remarking on how the new government is in charge, and looking after things that matter to ordinary people. They have a lot of work to do.

In ‘Tony Abbott choked by lack of vision, not ideology’ (June 21 2014):

… it was Hewson’s negative model of politics – how to lose an election by telling the people the truth – that had a greater impact on his apprentice than any of his positive lessons. Abbott so far has resisted the urge to utter a word of criticism of his former employer …

Besides, Abbott is not taking a vindictive approach to critics from his own side of politics.

In ‘Abbott unmasked: ideological warrior marches to the right’ (September 6 2014):

Abbott has set out to resume the Thatcher-Reagan revolution where Howard left off. He intends to advance it to a new apogee … To date, he has failed to take the country with him. But he has only just begun.

In ‘Tony Abbott’s national security address a siren call to the nation’ (February 26 2015):

By choosing to foster fear and division, by failing to embrace truly meaningful security recommendations such as a gun crackdown, Abbott has inadvertently exposed his weakness, not his strength. If we withdraw the benefit of the doubt, we see a failing leader merely posturing on national security in a sad effort to hold his job.

In ‘PM Tony Abbott’s “positive” poll shows he’s a dead man walking’ (March 2 2015):

Tony Abbott's supporters will claim today's poll as proof that there is life in his prime ministership yet.

Only a superficial reading can support this conclusion. In truth, it shows that it is already dead.


In ‘Abbott is a new man, but the left can’t see it’ (September 14 2013):

The truth is, Abbott in government is likely to be populist, political and pragmatic, rather than right-wing, reactionary and regressive.

In ‘Abbott in China shows skills beyond his years’ (April 10 2014):

But Abbott has spent a political career surprising those who underestimate the power of his intelligence, his people skills (funnily enough), and perhaps most importantly, his directness.

In ‘Abbott weak on home front, but a lion abroad’ (September 26 2014):

Despite his promise of smaller government and a smaller country, it has been Abbott's face-to-face relationship building and his deft leverage of Australia's Security Council presence, that has defined his administration's greatest heights – such as they are.

In ‘Abbott’s choice: change or face the axe’ (January 30 2015):

In a succession of dud decisions, their PM's gone quietly rogue, unburdened by the normal checks against gross error built into the system.

It’s the surprise at a failing Abbott, but even more the gravitas of the now-constant admonishing from some political journalists who before the 2013 Federal election failed to examine the kind of Abbottian government we were likely to get that … well … surprises. Never mind ‘don’t write crap.’ I just want to holler: ‘How in the name of every billion words poured onto the hapless heads of the previous Rudd/Gillard/Rudd government, not to mention on the heads of the Independent seers Windsor and Oakeshott, who detailed so fully what would come with an Abbott-led government, could YOU not see this coming?!!

I said to a mate recently that I was trying a look at whether and, if so, how Australian political journalists had managed to see through their own bias ‘for’ the Abbottian government and question its people and policy directions across its thus far brief era of custody. The mate’s response was that I should also consider ‘who cares?’ (implying himself).

So let’s consider who does care. Who cares whether political journalists and especially the press gallery, with noses pressed so closely to the ever-murkier glass of the chamber where the House of Reps sits, might have come to any realisation of what many have called their pre-election years of collusion or complicity or betrayal — or even treason?

Well I do.

And so, probably, do you, and every person who reads online blogs in Oz analysing the political state of the nation from a ‘progressive-ish’ point of view.

And every person of any and all ages and demographics who hit the streets, often for the first time in their lives, in the countless citizen protests, marches, demonstrations, sit-ins, vigils, lock-ins and lock-downs that erupted within three months of the Abbott government’s election and ceaselessly continue. Jonathan Green, host of ABC RN’s Sunday Extra, on the 14th December 2014 and in his last program for the year, ‘The Year That Was’, introduced a discussion segment with Melbourne-based playwright, activist and Guardian Australia columnist Van Badham this way:

There's a booming protest culture in Australia with almost as many people taking to the streets as the Vietnam protests of the sixties.

Green begins the segment suggesting that one way 2014 could be described is as ‘The year of protest’. Van Badham, in a brief but startlingly complete overview of protest activity across Australia in 2014, describes that parade of protest as a ‘carnival’ and pinpoints the use of social media as its vital and growing resource. (The Green and Badham discussion runs from 1 min 50 sec to 7 min 16 sec.)

Add, too, to those who care, every person who has been picking up in ever-increasing numbers on independent and ‘citizen’ online media outlets as they have grown ever-more dissatisfied with the fourth estate, this phenomenon being tracked especially by Margo Kingston’s No Fibs and David Donovan’s Independent Australia. (Very worthwhile reading lies at both links.)

Then add some well-known commentators on the state of Australian media.

Andrew Elder cares. Elder has been continuing his severe school for the serious reconstruction of recalcitrant political journalists all through the Abbottian era, handing out praise when considering it due and biting off those typing fingers considered fiddling about with irrelevance when not. Or savaging those media organisations, especially Fairfax (and no doubt soon the ABC), whom he considers have sunk to hiring the inept and avoiding the oncoming ‘brightest and best’ of future political journalism.

Tim Dunlop, eminently accessible as commentator on the media, cares, recently offering in ‘Is media objectivity an outdated mode?’, quite the most readable re-expression of the debate on the consequences of so-called objectivity and balance that has raged for decades across western journalism.

Dunlop compares two articles ‘reporting’ on Abbott’s Monday 23 February speech on national security (in front of six Australian flags): one by Michele Grattan and the other by Lenore Taylor.

About these he states:

… you could argue I am comparing chalk and cheese in that Taylor's piece is labelled analysis while Grattan's specifically isn't, and that's fair enough.

The bigger point, though, is: what even is the point of the sort of “straight” reporting Grattan has produced?

By striving to be "objective" her article is actually biased towards Mr Abbott's position. How does that help anyone? Except Mr Abbott, of course.

The bottom line is that governments and parties and various interests groups spend vast fortunes finding ways to manipulate information and public opinion. (All those flags behind Mr Abbott on Monday didn't appear by accident.)

Worse, the media is too often complicit in the manipulation.

Well, of course.

(And by the way, Hartcher’s pieces are labelled ‘analysis’ and Kenny’s ‘comment’. You spot the difference.)

Dunlop concludes by arguing that now social media can be the ‘journalist’s friend’ if they can bravely ‘own their own positions’ because ‘engagement with the audience is the new objectivity’. How? Because on social media a reader can demand the contexting of facts which, when only merely reported, can be intrinsically biased towards one side of politics or the other.

Last words to van Onselen:

Peter van Onselen @vanOnselenP March 3

I have to say, Tony Abbott is doing a good job of showing contrition on the GP copayment. Taking blame himself for the lack of consultation

Peter van Onselen @vanOnselenP March 3

.@MjrElvisNewton can I hire you to work your way through the right who slam me as a leftie to tell them all I'm actually one of them?

No, still don’t think Peter can do irony.

So, can we smell chunks of the political fourth estate on the run?

Or is it the scent of those who refused to see but — surprise, surprise — are now open-eyed and so very disappointed?

Are some turning?

What do you think?

About @j4gypsy

We hope you enjoy Jan's excellent piece on the changing media approach to Tony Abbott. Has the media turned against him or are the journalists, as Jan suggests, just 'surprised' and now frustrated that he has not turned out as they had hoped? Please let us know what you think. We know you won't be surprised but why are the journalists?

Next week we continue the media theme with 2353 examining the question 'Does social media influence politics?'

President Abbott: or why prime ministers should not be immune from removal by their party

After the failure of the ‘spill’ motion on 9 February, Abbott said:

We think that when you elect a government, when you elect a prime minister, you deserve to keep that government and that prime minister until you have had a chance to change your mind.

Ignoring that the polls were indicating the people had already changed their mind, the statement continued Abbott’s approach in the lead-up to the spill motion (and since) that he was elected by the people, whereas John Howard had previously said the ‘leadership’ was a ‘gift of the party room’.

Who is right?

Abbott’s approach, as was Kevin Rudd’s, is that he was elected by the people as prime minister but under the Westminster system of parliamentary democracy, which we use, members of the House of Representatives (where governments are formed) are elected by the voters of single electorates. They are elected to represent those electorates. Under the Westminster system, we have a strong party system in place to provide stable government — it would be next to impossible to have stable government if every individual member acted as an independent in the interests of their own electorate. That means that when we elect an individual member for an electorate, we also know to which party he or she will add their vote in the parliament. The leader of each major party, whether Liberal, Labor or National, is elected by the members elected to the parliament for that party (although Labor now includes an element of membership participation in a contested vote). It is true that we know the leader of each party going into an election and therefore who will probably be prime minister if the party wins enough seats to form government, but there is no rule that says that must be so — it is an expectation that has been created.

It is also true that election campaigns now tend to focus around the leader of each party and, in that sense, there is an element of a presidential election about the campaigns. (Whether that is good or bad is a debate for another time.)

In essence, we now have a Westminster system operating for and in the parliament but something closer to a presidential system operating in the way election campaigns are conducted. It is little wonder that voters become confused.

Despite claiming he was elected by the people, like a president, Abbott tried to use the Westminster system to defend his position in the spill motion. He called on his ministers to support him under the Westminster convention of ‘cabinet solidarity’ but ‘cabinet solidarity’ is primarily about policy decisions: it says that, no matter how much argument goes on in a cabinet meeting, once a decision is agreed each minister is bound to support that decision publicly — it is not meant to be about internal party politics.

There are significant differences between a Westminster democracy and a presidential democracy, particularly as operates in the US — from which we seem to draw most of our election campaign techniques.

The first major difference is that the US president is not only head of the executive government but also head of state. Our prime minister is only head of the executive government. The Queen of Australia is our titular head of state but the role is fulfilled by the governor-general and under our system the head of state has next to no role in the daily activities of government but the US president does. Our governor-general still signs laws into effect but does so on the advice of the government of the day and, certainly by convention, has almost no power to over-ride that advice. The US President can veto legislation passed by the congress if he (no ‘her’ as yet) does not like it.

A second major difference is that the US president selects his cabinet from anywhere — they don’t have to be members of the congress, indeed rarely are. In our case, not only the head of the executive government but members of the cabinet are drawn from those elected to the parliament. There is no rule that this should be so but it is one of the conventions of the Westminster system. The fact that the Westminster system relies on convention, rather than being enforced by rules, was evident when Campbell Newman first became leader of his party in Queensland while still outside the parliament: we could not countenance, however, that he could become a member of the government while outside the parliament and a seat had to be found for him before the ensuing election.

The American system is very much the old system of a democratic monarchy. The monarch (president) selects his own ministers (secretaries of state) and they are required to appear before parliament (congress) to answer questions about, and be held accountable for, actions they may have taken or not taken, as the case may be. Basically all the Americans did when they achieved independence was replace the monarch in that system with an elected president. And a little like the Abbott and Rudd misapprehension in Australia that people vote directly for the prime minister, it is also a misapprehension in the US that people vote directly for the president. They are actually voting for members of an ‘electoral college’ at the state level, who then join all those elected by other states and select the president. Originally members of the electoral college were free to vote for whomever they liked but now most states nominate all their electoral college votes to the winner of the popular presidential vote in that state. The electoral college was introduced because the early founders of the US republic were wary of giving the people a direct say in the election of the president and because it was feared that someone sympathetic to the British could be elected and effectively ‘undo’ the revolution: the college was an intermediary that also gave the states a greater say in the election of the president. (Apparently there have been four occasions when the electoral college votes did not match the popular vote, including in 2000 when George W Bush was elected.)

Which approach is more democratic? (As an aside, I did once convince an American, using the preceding arguments, that their system was closer to a democratic monarchy.)

In our system all members of the government have been voted for: they have won an electorate somewhere in the country or a large enough proportion of the vote to be elected to the Senate. There are no outsiders. Ministers can be voted out of parliament just like any other member, as can prime ministers (Howard) and state premiers (Newman).

The closest our prime minister comes to a presidential power is the ability to select ministers, remove ministers and move ministers in what we commonly call a ‘reshuffle’. (Technically it is the governor-general who has that power but, because the governor-general must act on the advice of the government, it is effectively the prime minister.) While that has always been the Liberal way, Labor only adopted that approach when Rudd became prime minister. Before that the Labor caucus elected from its number those who would be ministers and a Labor prime minister could only allocate portfolios to those who were elected. (Labor returned to that approach in opposition when Bill Shorten was elected in 2013.) Ministers can be removed for many reasons: misbehaviour outside the parliament, not being a good minister, disloyalty (as perceived by the prime minister or the party), travel rorts, undeclared gifts, undeclared pecuniary interests, and so on, or simply the need to reward someone else with a ministry.

Abbott has already selected one ministry and conducted one reshuffle so he has exercised that power. If ministers can be removed in such a way, it logically seems to follow that prime ministers can also be removed within the parliamentary party system, not only by popular vote. Even the name ‘prime minister’ suggests that — the person is only the ‘first’ minister, or the ‘chief’ or ‘head’ minister, but still a minister. If people can only vote once every three years (in the normal course of events) who has the power to remove a prime minister in between? We know from 1975 that the governor-general is one such person but it requires extreme circumstances that cannot be resolved politically or by the courts.

There is an argument that democracy can be enhanced by the use of plebiscites and ‘recall’ votes, as in a number of US states. Such an approach certainly allows for democratic participation in consideration of major issues and legislation and provides a capacity to ‘recall’ a leader or representative who has lost the support of the majority of the population. Would such an approach work in Australia? I don’t think so.

Australians are notorious for viewing voting as an irksome duty, not something they willingly undertake to express their democratic rights. A majority tend to want to vote and then leave the government to ‘get on with it’ for the next three years and not bother them too much: as Howard once described it, we want to be left alone feeling ‘relaxed and comfortable’. But we do react when things are going on that we don’t like and that is expressed in the opinion polls, sometimes in public dissent and these days on social media.

Under the presidential system, when a policy proves unpopular, it is most likely that a secretary of state will be removed so that he or she is no longer a symbol of a disliked policy. The president, as head of state, must remain. Although it is also possible to remove a minister under our system, it has become the case that the prime minister now seems to represent all facets of the government and wears the blame for policy miscalculations. In Abbott’s and Rudd’s cases that blame is probably warranted because of the way they centralised power within their own offices. It can also apply more generally because our prime minister is head of the executive government and therefore bears some responsibility for all actions of the government (just as the CEO of a company does): our prime minister does not have the immunity of a head of state.

Popular expressions of discontent with policy can’t actually change the prime minister — only an election or a party-room vote can do that. Therefore public expressions of dissent between elections can only be meant to encourage the parties to change their policies or their leadership, or both.

Liberal party leaders have always had a lot of power, perhaps because the party was founded around an individual, Robert Menzies. That leads to many more ‘captain’s picks’ as we are now seeing with Abbott as leader. Labor leaders historically have had less power but Rudd changed that hoping to entrench his own position. Now a Labor party-room change of leader requires a petition signed by 75% of the caucus when in government, or 60% of the caucus when in opposition. It does not seem to apply if a leader steps down. If the new leadership is contested, then a vote takes place that includes Labor party members. It is not impossible to change a Labor leader between elections but it is more difficult under the new rules: it is likely to lead to greater use of the ‘tap on the shoulder’ to encourage a leader to resign rather than go through the petition process and also to factional agreements to nominate only one person for the leadership to avoid a vote.

One of the arguments that was put in favour of Rudd’s new rules was that it allows ‘hard’ decisions to be made without concern about the polls. In a democracy, however, governments should be in the business of convincing the people that hard decisions are justified. Hawke and Keating made major changes largely through consensus of key stakeholders and publicly arguing the need for change. Even Howard’s GST was spoken about for some time before it was introduced and did go through one election that the Liberals won despite the GST — so there was a mandate of a sort. If prime ministers are safe in their position, with no ability to remove them before the next election, then they may see no need to convince the people about the correctness of any policy approach — which seems to have been the attitude Abbott and Hockey took with the budget.

What is wrong with a party removing its leader if it is seen that the leader has lost the support of the people or that the policies being pursued are being rejected by the people?

I think that removing a party’s ability to remove its leader would lead us towards a presidential system that is undemocratic. Where is the democracy in a system that says the prime minister cannot be removed, except at an election, if the people are already speaking through the polls, through demonstrations and on social media? If a party cannot remove its leader in such circumstances, then it is not listening to the people — and that is not democratic.

Mr Abbott, like Mr Rudd before you, you are not a president, you are not a head of state, and your party room can remove you in the interest of democracy.

What do you think?

About Ken

This week Ken argues that the party-room removal of a prime minister is an expression of democracy, not an undemocratic procedure as Rudd and Abbott have claimed. Please express your own democratic rights and post a comment on whether Ken is right.

Next week we welcome the return of our resident gypsy, if a gypsy can be said to be resident. Jan presents a piece questioning why the mainstream media, after spending so long supporting Abbott, now seems surprised at his incompetence. The piece, of course, is entitled, 'Surprise, surprise ...'

But we’ve done tax reform – haven’t we? (Part 2)

Last week we briefly looked at some of the problems with the current tax system. It seems that a number of those who should have a high level of understanding of the fundamental flaws in the current taxation system agree that the system needs reform.

Price Waterhouse Coopers suggest:

. . . there is a clear need for comprehensive tax reform — done the right way. The ‘right way' means increasing those taxes that have the least effect on investment and employment, and at the same time reducing reliance on taxes that distort incentives to work, invest and transact business. It also means addressing those factors which increase the complexity of the tax system and the cost of compliance.

Business Spectator reports:

Without widespread tax reform, the Australian government faces a prolonged period of sluggish wage growth and poor productivity. That might sound pessimistic but that’s the simple equation laid out by outgoing Australian Treasury secretary Dr Martin Parkinson.

Peter van Onselen wrote in The Australian (pay walled):

To the extent that consensus among tax professionals on the best way to collect revenue can be found, broad-based taxes are preferable to direct taxes. That’s because direct taxes such as income tax fall victim to bracket creep and stifle productivity. They feed into higher wages, too, which can affect inflation and Australia’s international competitiveness adversely.

But broad-based consumption taxes such as the GST can be regressive, in so far as they hurt lower-income families disproportionately to higher-income families given their flat application.

But this is a situation that can be easily overcome, is generally overstated and certainly isn’t a reason to abandon GST reform, which must be tackled boldly by our political leaders. It is always possible for policy decision-makers to make up for regressive GST application on the spending side.

Firstly, lets discuss the difference between ‘broad based’ and ‘direct’ taxes.

A ‘broad based’ tax is something like the Medicare levy. Everyone who pays tax pays a percentage based on their level of income to fund the ‘free universal’ healthcare system supported by the government. Distortions exist to ‘manufacture’ compliance with various social policies such as the surcharge made to those on higher incomes without private health insurance. GST is another ‘broad based’ tax: as the value of the tax is based, however, on the goods or services being purchased, rather than people’s incomes, someone on $40,000 per annum proportionally pays a higher rate of tax than someone on $140,000 per annum should they decide to purchase the same product. This distribution effect can be ‘engineered’ out through use of rebates etc. — as was promised with the Carbon Pollution Reduction Scheme (Carbon Tax).

Direct taxes are charges such as income tax. You pay a certain percentage based on your income. While someone who is in the fortunate position to pay tax on the highest ‘margin’ pays more dollars than someone on the lowest margin, the person on the lower margin usually contributes a greater value of their annual income.

So, according to the experts, the problem is the complexity and ‘side effects’ of the current tax system: to fix the problems, move to broad based taxes based on equitable criteria and simplify the system. Sounds reasonably easy, doesn’t it?

This is where the politics comes in. In 1975, Asprey and Parsons handed over the full report of the Taxation Review Committee. The Asprey Report received little attention from Whitlam or Fraser: it did contain, however, discussion around the major taxation reforms of the 1980’s and 1990’s (capital gains, dividend imputation and GST to name a few).

The Rudd/Gillard government commissioned Ken Henry, former treasury secretary, to perform another review of the taxation system in 2010. Henry’s review (which was told not to look at the GST — one would assume for political reasons) suggested a number of reforms to improve the taxation system. The politics surrounding the review was that ‘a package’ would be recommended. Ken Henry obviously disagreed. The Henry Review advised:

The review has aimed to set strategic directions for the future architecture of the Australian tax and transfer system. It has not produced a one-off tax policy package, and it has not advanced the detailed design or timing of measures. Indeed, it is neither possible nor desirable to make all of these changes (138 recommendations) too quickly.

In the words of John Hewson:

. . .those expectations were there, so when they were thwarted, the Review was all too easily dismissed, politically, as “just another study/review/inquiry”, easily essentially shelved by the media, although [the government] also all too easily “cherry-picked” with attempts to implement just a handful of its recommendations.

Against this background, the [then ALP] government only picked some “high profile” recommendations immediately, such as the mining tax, and when that backfired, it then only did smaller issues, quietly, leaving the bigger issues like savings and State taxes untouched.

Hewson goes on to note that the Rudd/Gillard government implemented 40 of the Henry Review’s recommendations but the Abbott government has since reversed the implementation of all but seven of them — without identifying the recommendations came from the Henry Review.

This piece started with a comment from an accountancy/business services firm (Price Waterhouse Coopers) stating what it believes is necessary. Not to be outdone, others have expressed their opinion as well, including Ernst & Young, The Conversation here and here, the Housing Industry Association, Newscorp’s The Australian (pay walled) and Prosper, an organisation that has been campaigning for a century for a greater reliance on property taxes to replace direct taxes. There are no doubt others as well — time precludes finding them and space from listing them.

Each group that enters the tax reform debate overtly or covertly expresses an opinion that would assist their members or customers — as is their right. It certainly doesn’t help any government in designing a fair and equitable solution for all of society, especially when affected industry groups commission and use selected facts in television advertising that certainly don’t mention that compensation to taxpayers was a part of the deal.

Politically and economically, tax reform is a hard ask. Hawke/Keating and Howard/Costello both were successful to a degree in implementing reforms to the Australian taxation system. There are also those that suggest the whole system should be replaced by ‘flat taxes’.

Of course there are a number of versions of ‘flat tax’ from the ‘pure’ — everyone pays a percentage of their income with no deductions or rebates allowed — through to systems that allow deductions, negative taxes and other arrangements. Wikipedia discusses some of the different versions here.

The economics editor of The Australian argues that ‘flat tax’ is an economic necessity (pay walled). In 2010, Abbott, then opposition leader, suggested a version of flat tax would be beneficial and commented it was recommended by the Henry Review. The ALP disagreed. Greg Jericho, writing on ABC’s The Drum website, suggests that ‘Unless you’re wealthy, you’re not going to like flat taxes’. Jericho makes the point that flat taxes are by their nature regressive, as they are a ‘broad based’ tax.

Remember the disparity in the actual proportion of a person’s income when buying a product we looked at a couple of hundred words ago? Twenty per cent of $140,000 is $28,000 and 20% of $40,000 is $8,000. So the person on $140,000 still has $118,000 per annum to spend while the person on $40,000 only has $32,000. Regardless of the dollar amounts, the person on the lower income is paying more value from their income when a broad based tax (such as a GST or ‘flat income’ tax) is levied. Certainly there can be some ‘engineering’ of the tax system so that the value contributed by both the higher and lower income earner can be made fairer but that is adding to the cost of managing the tax revenue and reduces the ‘purity’ of the revenue collection system.

Hewson, in his paper, suggests that Hawke/Keating achieved some tax reform because they crafted a message supporting the need for change to the then system by way of the ‘Tax Summit’ and demonstrating that change would reduce the level of tax evasion, such as the ‘bottom of the harbour’ scheme that was apparent in the 1970’s and 80’s. He also claims that his “Fightback” package, that was taken to the 1993 election, was the subject of various campaigns to create fear, uncertainty and desperation. To an extent, it is a fair call. Hewson also suggests that 1% of tax revenue is taken by the administration of the tax revenue system — demonstrating its complexity.

It seems that a simplified revenue collection system is a given to make our taxes work harder. Another factor that needs to be considered is the current rhetoric from political parties of all colours that the country’s budget is closely related to a household budget and has to either balance or be in surplus.

To simplify the current revenue collection system, tax reform is needed. If tax reform is discussed, every ‘special interest’ group in the country will have its say in an attempt to protect the interests of their members/customers. While ‘flat taxes’ are superficially attractive, they do have a tendency to favour those earning a higher income unless ‘engineering’ is performed to make the tax impost fairer (in which case what is the point of a nominally one-size-fits-all ‘flat tax’ system?).

Something that recent governments have painted themselves into a corner on is the mythology that the country’s budget is similar to a household budget and must be balanced or in surplus. It doesn’t — as Australia issues it’s own currency. The Conversation recently discussed ‘Why the Federal Budget is not like a household budget’ and noted:

The real calculation faced by government should not be about how much money the government has — it has an infinite amount. The calculation should be about the capacity of the economy to absorb government spending without driving inflation.

Seeking a balanced budget and automatically borrowing any deficit spending (as we currently do) is an effective but unsophisticated way of ensuring government spending doesn’t cause runaway inflation. Taxes and government borrowing remove money from the private sector, creating space for government spending (which injects money into the private sector). Remember, the government does not have to borrow or tax in order to finance spending because they can create money.

The Political Sword has previously looked at the fallacy of the balanced budget debate here and here. Peter Costello (former treasurer) not unsurprisingly has a comment on the difficulty of balancing budgets versus tax reform:

This is harder than balancing a budget and I've done both.

John Hewson’s push to become prime minister in 1993 failed due in part to a lack of understanding of his tax reform measures. John Howard found that he could not pass the GST without diluting the ‘purity’ of the tax to appease the Australian Democrats; Julia Gillard had to negotiate to get a ‘watered-down version’ of the Mining Tax through the Senate. So far, Abbott’s government has not demonstrated that it can negotiate well enough to ensure that the minor parties and independents in the Senate would commit to a package of reasoned and logical tax reform.

During October 2014, Abbott called for a mature debate on inter-governmental relations in general and the GST in particular. It is unlikely to happen until either the current government learns how to build a consensus as Hawke and Howard did or has the numbers and the motivation to do something for the common good. Either way a mature debate cannot be conducted in 30 second sound bites so loved by our current prime minister and the media.

What do you think?

About 2353

This week 2353 completes his ‘Tax reform’ discussion and paints the political difficulties of achieving tax reform. As he writes, almost everyone agrees we need tax reform but we don’t seem able to come to agreement on what should be done. Please tell us your views of tax reform and how we can achieve it.

Come back next week for Ken’s view of "President Abbott: or why prime ministers should be not immune from removal by their party".

But we’ve done tax reform – haven’t we?

Here’s a tip for 2015. If the Abbott Government can remove the current opinion polls and stories of excess and incompetence from the front pages, it has been signalling that it intends to tackle ‘tax reform’ during the life of the current government. It wouldn’t be the first to attempt to do this: Governments back to the days of Hawke in the 1980’s have legislated large changes in the way the government charges for the services it provides — and the continual evolution of the Australian and international community would indicate that further changes are necessary now and in the future.

There is an implication that the governments that rate highly on ‘economic management’ also seem to be considered ‘good’ governments. The Hawke/Keating Government introduced a number of changes to tax collection practices during the 1980’s, as did the Howard Government in the 1990’s, and were still considered ‘good’ governments. No doubt Abbott would like to share the same perception.

This week’s discussion piece is a very brief overview of some of the issues with payment of taxes (charges and levies); next week we will look at some of the realities of ‘tax reform’ — why it isn’t as easy as some commentators, politicians and academics suggest.

In an ideal world, taxes would fund measures to ensure that everyone has an equal standard of living — ensuring that each member of society pays an equal amount of money to receive an equal amount of benefit. We don’t live in an ideal world.

Naturally, each member of society perceives their needs and wants to be more important than others: if for example I am retired and can’t fund my own living expenses, I expect the government to provide an allowance to make it easier to meet my ongoing commitments and live to a standard that is similar to that I enjoyed when I was employed. In contrast, if I am a parent with a young family committed to pay a mortgage and the expenses of young children, I would look to the government to give me a supplement to my income to assist in the provision of essentials to what are effectively non-productive members of the family (‘my’ children) as well as assistance towards the costs of child care, maternity leave and so on.

Both groups of people have an equal expectation of government support and an equal reason to believe the government should assist them — after all the retired person has contributed to society through their labour and payment of taxes for a considerable period of their lives; while a parent is still contributing labour and taxes while bringing up children who will in turn contribute labour and taxes to support the community into the future. The unfortunate thing is that when a government claims (probably with some justification) that it cannot afford to be as generous as it was in the past, there is a considerable proportion of the population who believe that their needs or wants are more important than other groups within the community: why are others getting some benefit which is reducing the funding that I can claim?

There is a ‘long and proud’ history of robust discussion of taxation matters in Australia. In 1854, the Eureka Rebellion in Ballarat was primarily a revolt against the imposition of a tax (licence fee) on miners, regardless of their success at their chosen profession. While it could be said that they lost the battle, the miners won the war with their leader, Peter Lalor, being elected to the Victorian Parliament along with eight other miners in 1855.

At the Print Media Enquiry in 1991, Kerry Packer is reputed to have said:

I am not evading tax in any way, shape or form. Now of course I am minimizing my tax and if anybody in this country doesn't minimize their tax they want their heads read because as a government I can tell you you're not spending it that well that we should be donating extra.

‘In this world nothing can be said to be certain, except death and taxes’ observed Benjamin Franklin in 1817. There are also a number of comments regarding the morals and ethics of the Roman tax collectors in the Bible. It seems that Australians aren’t the only ones that don’t appreciate the need for taxes.

Packer altruistically assisted the funding of installation of defibrillators in most New South Wales ambulances, so he wasn’t averse to donating money to a ‘good cause’. However, he has a point: why should I pay proportionally more than the next person to the government to fund community services?

John Hewson, is the ex-Liberal Party Federal Leader who took a GST to the 1993 election as a part of his “Fightback” package, and lost. Hewson is now a professor of economics at Australian National University and an occasional media commentator. He observes when tax law was introduced into the Federal Parliament in 1915, the act consisted of 24 pages, but in the 1980s the legislation ran to some 1200 pages and today it tops out at some 5500 pages. Clearly as the government has discovered ‘faults’ in the legislation, it has amended the legislation to rectify the errors. That has led to those who can afford the cost finding additional loopholes that have yet to be plugged by the government of the day. After all, as Kerry Packer pointed out (above), tax minimisation is perfectly legal — tax evasion isn’t. The Australian Taxation Office (ATO) annual report for 2013/14 runs to 266 pages, which seems to be rather a lot when all they should really be saying is everyone paid their fair share and the world moved on.

There are a number of factors for the dramatic increase in the size, and one would imagine complexity, of tax law in the past 30 years. Let’s look at two of them: tax compliance and tax minimisation.

During the 1970’s, some lawyers and accountants devised a system where companies were formed, traded, made profits and just before tax was to be paid, the assets of the company were given to another related entity and the former company shell sold to an unsuspecting person without the financial backing to pay outstanding commitments, such as tax on the original company’s income. The ATO was an unsecured creditor (a person or legal entity who is owed money by the business without legal entitlement to any of the assets by way of a mortgage or charge) to the original company, along with unsuspecting service providers and employees, and effectively got nothing as it was a pointless exercise to bankrupt the unsuspecting person. The scheme is known as the ‘bottom of the harbour’ as effectively the companies that were stripped of assets were sent there to drown.

In recent times, the ATO has prosecuted a number of ‘famous’ and ‘influential’ people as a result of Operation Wickenby, including The Masters Apprentices bass guitar player and John Farnham’s manager Glenn Wheatley and star of television comedy and movies (including Crocodile Dundee) Paul Hogan.

Tax minimisation is completely legal, but it reduces the tax revenue available to fund the services we as a community expect the various levels of government in Australia to provide. There are a number of ‘common’ schemes that are used on a daily basis including:

    • Negative gearing –To ‘negative gear’ you borrow money to purchase an asset that will not pay it’s own way (such as an investment property or share portfolio). The difference between income from the asset and the costs of the asset, including interest, can be claimed as a tax deduction. Those that use this scheme often offset the losses against other income (thereby reducing their taxable income) and also hope that a future increase in the price of the asset when it is sold will equal or exceed the losses they have claimed on their tax return.
    • Novated leasing - A three way agreement between an employee, employer and financial company where the employer nominally purchases a car (or similar) for an employee and funds the purchase from the employee’s pre-tax income effectively reducing the employees taxable income and tax liability.
    • Exporting profits - Apple is the subject of the link here as it apparently transferred around $2 billion to an Apple related entity based in Ireland while declaring and paying tax on a profit of under $100 million in Australia during 2013. Apple is not the only global company using this strategy. Other household names also move the bulk of their profits around the globe to avoid paying tax as well. How it works is the Australian customer deals with an Australian seller, but the financial transaction takes place in another jurisdiction where a significant proportion of the purchase price is claimed for the ‘production of the item’ and ‘intellectual property’ used in the product. That amount is sent directly to a related corporate entity in a country that offers the company a better tax treatment than Australia. The only part of the purchase that is ‘transferred’ to the Australian company is the price of the sale infrastructure and transport of the item to the purchaser. It is fair to say that a number of these ‘arrangements’ will cease to exist in the next few years as it has been recognised as a significant issue by governments and is now the subject of negotiations at events such as the G20.
In addition, governments of all colours introduce ‘targeted’ tax benefits or liabilities to manage social behaviours. There is a significant tax impost if someone purchases a packet of cigarettes — the argument being that there is a measurable drop in consumption of cigarettes (an arguable benefit to society in reducing smoking related illness) every time the tax rate rises. Australia also introduced a ‘Luxury Car Tax’ in 1990 in an effort to improve the viability of local vehicle manufacturing. Australian engineers can design a competitive product as shown by Ford and Holden/General Motors retaining the capacity to design a vehicle from the ground up once the current manufacturing capacity is withdrawn. A discussion on how and where Luxury Car Tax applies is here. Then GST is applied to the final cost of some products (including taxes), so we are paying tax on tax in some cases.

John Hewson claims:

… there are 125 taxes paid by Australians annually — 99 levied by the Commonwealth (recognising many agriculture and food levies), 25 by State and Territory governments, and one by local governments. These revenues are heavily concentrated with over 90% derived fro[m] just 10 taxes, reflecting 95% of Commonwealth revenue, over 60% of State revenue, and 100% of local government revenue.

Hewson also observes that over 66% of Australians use the services of agents to submit their annual tax return — surely an indictment of the perceived complexity of the system.

So we have a complicated system of taxes, charges and levies, which has been added to and amended over the past century. Is ‘tax reform’ a good idea in theory? — of course it is, but there is a political cost to doing it, ask John Hewson.

What do you think?

About 2353

The next part of this discussion will be posted next week and looks at the practicalities of introducing a fair, reasonable and easy to understand taxation system.

Abbott continues to tell porkies

I was surprised during last December (and again in the past week after the unsuccessful spill motion) when Abbott and his ministers reverted to the line that the LNP government had inherited a huge budget deficit from Labor.

Early in December they were claiming that Labor had been deceitful by going into the 2013 election claiming that the deficit was only $18 billion whereas when the Liberals gained the treasury benches it was shown to be $46 billion (and I noticed in Abbott’s appearance at the National Press Club at the beginning of February that he had rounded this up to $50 billion). That attack, in itself, was part of Abbott’s resetting of the agenda after his ‘ragged week’ and was obviously intended to turn attention back on Labor and away from the problems his government was facing: there is no doubt that approach will continue.

The first lie is the $18 billion deficit. That was the figure in the last Wayne Swan budget in May 2013 but Swan also made an ‘Economic Statement’ in August (during the election period) as the terms of trade deteriorated and economic activity slowed, reducing government revenue. By the time of the PEFO (Pre-election Financial Outlook) the deficit was actually $30 billion, which had been revealed slightly earlier in Swan’s ‘Economic Statement’. The $12 billion increase came from slowing GDP growth, and the subsequent decrease in revenue, and only $373 million (about 3% of the increase) arose from policy decisions by Labor. So Abbott’s claim that there was a $28 billion increase in the deficit is a fiction created by adopting a set of figures that had already been superseded before he was elected (although semantically it was the figure ‘going into the election’ — so perhaps Abbott is just playing with words again).

Abbott’s claim, however, was also dealt with at the time and found to be false. In June last year, Chris Bowen said that Joe Hockey had doubled the deficit by changes to government spending and changes to government economic assumptions and parameters: the ABC’s Fact Check found that Bowen’s statement — ‘checks out’. Other economic commentators also pointed to the spending and revenue decisions made by the Abbott government as making a major contribution to the increased budget deficit.

Although it has been done before, I will go through the details of the government’s finances. Please bear with me, as I will have to provide quite a few figures in explaining the situation, using the 2013-14 PEFO and MYEFO (Mid-year Economic and Financial Outlook), with some minor reference to the last two budgets. And it should be noted that the PEFO is the only financial document that is put out by Treasury and the Department of Finance. MYEFO and the budget are products of the government of the day after, of course, taking advice from the financial departments, but the final shape of those documents is always a result of government decisions. PEFO simply sets out the current situation based on the ruling assumptions and existing policies.

Firstly, we do need to understand that treasury forecasts are simply that — they are ‘estimates’ and ‘projections’. As such, they are subject to many qualifications and assumptions. Treasury itself states that:

The forward estimates of revenue and expenses … incorporate assumptions and judgments based on the best available information at the time of publication together with a range of economic assumptions and other forecasts and projections.

Major taxes such as company and individuals’ income taxes fluctuate significantly with economic activity. Capital gains tax is particularly volatile and is affected by both the level of gains in asset markets and the timing of when those gains are realised.

In addition revenue forecasting relies heavily on the observed historical relationships between the economy, tax bases and tax revenues. Such relationships may shift over time as the economy changes, presenting a further risk to the estimates.

(In relation to that last statement, the economy is currently undergoing changes as the mining boom ends and, therefore, there is an increased risk to the surety of the estimates.)

The MYEFO gives examples of the potential impact of certain hypothetical changes. If commodity prices fall, impacting the terms of trade and causing GDP to fall by one per cent, then government revenue could be reduced by $5.5 billion. On the other hand, if there is a 0.5 per cent improvement in both labour productivity and workforce participation, government receipts could increase by $3.7 billion.

Those examples are important because Treasury also explains the ‘confidence levels’ of the economic and fiscal forecasts. For example, although MYEFO forecast GDP growth of 2.5%, the 70% confidence level places growth anywhere between 1.75% and 3.25%, and the 90% confidence level between 1.5% and 3.5%, which means the preceding hypothetical examples actually fall within the range of possible forecasts.

With those provisos in mind, we can consider the actual figures and what went into increasing the budget deficit. If we believe Abbott the increase was $28 billion but only $16 billion if we believe PEFO. Or we can also look at the accumulated deficit over the forward estimates (to 2016-17) which increased from $54.6 billion to $122.7 billion, a difference of $68 billion. I will work on the last figure because that provides the full impact of Abbott government decisions.

Firstly, you will probably recall Hockey’s payment of $8.8 billion to the Reserve Bank, something the economic commentators said was not sought by the bank and was unnecessary. That leaves $59.2 billion to account for.

Abbott’s big ‘policy’ of repealing the carbon ‘tax’ was a major contributor to the loss in government revenue, to the tune of $13.7 billion over the forward estimates. That leaves $45.5 billion.

Repeal of the mining tax saw the loss of another $3.3 billion. That leaves $42.2 billion. (Those three big ‘decisions’ by the Abbott government cost the budgets over the forward estimates a total of $25.8 billion.)

There was another set of significant losses to revenue that many of us would not have heard about. Apparently there were 92 taxation and superannuation changes that had been announced by previous governments but not yet implemented. Abbott and Hockey decided to proceed with only 34 of those changes, foregoing another $3.1 billion in revenue. That leaves $39.1 billion.

The ABC Fact Check explains changes to a couple of the assumptions and parameters better than I can:

  • a change to the terms of trade methodology, reducing the economic growth forecasts, causing a $2 billion hit to the bottom line over the forward estimates
  • a change in the projected unemployment rate, leading to higher benefits payments totalling $3.7 billion extra
That leaves $33.4 billion.

But there was also a projected slowing of the economy: GDP growth figures were lowered. While this is something over which neither the Labor nor Abbott governments have much control, the Treasurer does have a say in selecting which figure to use for the forecasts (see the earlier paragraph on confidence levels). In MYEFO, the slowing economy was projected to reduce taxation receipts by $37 billion over the forward estimates.

So Abbott government decisions had actually increased the potential deficit by $71.6 billion over the forward estimates and it had to juggle the figures even to keep the increase to $68 billion. Even allowing that some of the worsening of the deficit would have happened no matter who was in government, Abbott government decisions directly added about $29 billion to the deficit (and up to $34.6 billion if we add the government influence in changing parameters).

Offsetting those losses, Abbott and Hockey had proposed abolishing the benefits introduced by Julia Gillard that were to be funded from the carbon and mining taxes. That would have decreased spending by $9.5 billion or reduced the deficit by that amount: but, of course, he has not been able to abolish all of those measures, so the deficit remains higher. Even if they had passed the parliament, the deficit would still have increased by $62.1 billion of which at least $20 billion would have arisen from decisions by the current government.

Estimates of government revenue for 2013‒14 were continually revised downward from the 2013‒14 budget through to the 2014‒15 budget:

  • $376 billion in the 2013‒14 budget
  • $369.5 billion in the PEFO
  • $364.9 billion in the MYEFO
  • $363.5 billion in the 2014‒15 budget
Despite that continual revision, the actual figure for the 2013‒14 financial year was lower still at $360.3 billion, $15.7 billion below the original budget estimate in May 2013 and even $3.2 billion below Hockey’s budget estimate in May 2014. So there are clear revenue problems for the government that have nothing to do with decisions by the former Labor government.

(As a postscript, Hockey’s more recent MYEFO in December 2014 also showed that revenue was continuing to decline in 2014-15; down $6.3 billion since his own budget estimate and down almost $21 billion on the forecast in Swan’s last budget.)

You would think that if a government takes decisions that decrease revenue it would also take other measures to increase revenue (not focus solely on cutting costs) but Abbott’s government has locked itself into the neo-liberal position of reducing taxes and so has very little room for manoeuvre. During the election campaign, it could be argued that Abbott lied by omission by not detailing how he would make up the foregone revenue ($17 billion) of his promises to abolish the carbon and mining ‘taxes’. People were left to believe that the ‘taxes’ could be abolished and nothing more need be done. I would suggest that Abbott knew that at the time and, given his promise not to raise taxes, already knew that he would undertake significant spending cuts to make up the shortfall — but of course he wouldn’t discuss that in any detail. And then, to justify the cuts, his government artificially increased the deficit and blamed it on Labor.

If Abbott and Hockey had really wanted to increase revenue to improve the budget position they would have kept Labor’s tax on annual superannuation earnings above $100,000 and the reduction in the fringe benefits tax concession on novated car leases: or have considered similar measures on other ‘tax expenditures’. Tax expenditures are foregone taxes when government provides certain benefits without taxing them or allows concessional tax rates: for example, military personnel receive a number of allowances and benefits that aren’t taxable although legally they are ‘income’. (It is only the tax foregone, not the full cost of the benefit that is counted.) Changing tax expenditures allows governments to increase revenue without increasing income tax, although there would obviously be vested interests who would ‘lose’ from such changes — such as the outcry from vehicle retailers and manufacturers when the change to the taxation of novated car leases was first announced.

In the 2013-14 budget the cost (foregone revenue) to government of tax expenditures was about $120 billion and was projected to rise to $146 billion in 2016-17 (which is the equivalent of 8% of GDP or about a third of projected government revenue in 2016-17).

While many concessions would be considered socially beneficial, there are others that appear to be of most benefit to those on higher incomes — superannuation is the one most commented on in that regard. In 2013-14 it was estimated that the concessional tax applying to superannuation cost the government $35 billion in revenue and that was projected to rise to $51 billion in 2016-17, or a total of $170 billion over the forward estimates. Eliminating the concessional tax rate for the earnings of superannuation funds would raise $65 billion over the forward estimates, and eliminating the concession for employer contributions would raise $62 billion, a total of $127 billion. While it would somewhat defeat the purpose of compulsory superannuation (to reduce old age pension payments) to entirely eliminate concessions, there is certainly scope for changes that could easily raise a few billion dollars: for example, even to raise the concessional tax rate from 15% to 17.5% could potentially raise $4.25 billion over the forward estimates: or $8.5 billion if raised to 20% — that is still a ‘concessional’ rate of tax but just not as generous.

Why isn’t Abbott considering such measures? Instead, he is even scrapping the changes that Labor made that would have helped revenue.

He is blaming the deficit on Labor when it is clear that about half of the increase in the deficit comes from a ‘natural’ fall in taxation receipts as the economy slows and transitions away from the mining boom, and the rest from decisions by Abbott and his government after it came to power. Other commentators, more expert than I, have already shown his claim is false and yet he returned to it in December, and again in the past week, obviously taking the view that because it was disproved six to eight months earlier most voters would not remember. That is probably partly true but it is also pure propaganda, no longer just ‘spin’: ‘spin’ is about putting the best possible light on a bad situation, not about blatant lies. Abbott, as he did in opposition, appears to be operating on the principle that if he tells the same lie often enough, people will believe it.

What do you think?

About Ken Wolff

Ken says that although this is old news he will have to keep returning to it because that is what Abbott and Hockey keep doing.

Next week we will continue the financial theme and how to raise revenue with 2353’s discussion of ‘Tax reform’.

If you doubt the scientists, what about the actuaries?

There’s an old adage that if you want to know who will win an election follow the bookmakers’ odds or where the punters are putting their money rather than the polls (particularly when the polls are close). Something similar could be said of climate change. For Mr Abbott and others like him who remain sceptical of the science, they should instead follow the risk assessment of the actuaries as they advise the insurance and reinsurance industry and the investment banks.

The actuaries do not concern themselves directly with the science but with evaluating the risk and the costs that arise from it. As the actuaries put it:

Our role as actuaries is to help optimise decisions. We don’t seek to prove or disprove the estimates made by the experts but we need to understand what they are saying.

Australian actuaries have been at the forefront in taking environmental factors, including climate change, into account, establishing a committee in 1998 to examine environmental and energy issues as they affect their profession. In January 2012 Australian actuaries played a significant role at the ‘Climate Change Summit for Asia’s Insurance Industry’ in Singapore. American actuaries were slower to react (their first climate committee appeared in 2005) but are now developing an Actuaries Climate Change Index and an Actuaries Climate Risk Index, initially for North America, that cover a range of factors, including obvious ones like temperature and precipitation and lesser known factors like soil moisture.

Munich Re, a major reinsurance company, issued details in 2011 [page 11 of link] showing that the number of weather-related catastrophes between 1950 and 2010 was on an upward trend (and weather-related events accounted for about 85 per cent of insurance claims). There was a sequence of bad years between 1986 and 1999, with a peak of 14 catastrophic weather events in 1993. The years 2004, 2005 and 2007 also had an above average number of major weather events. Although it seemed slightly quieter from 2008 to 2010, 2011 became the costliest year on record (but not just from weather events) for the global insurance industry following the earthquake and tsunami in Japan, the Christchurch earthquake and hurricane Irene in the US — total insurance losses for the year of $105 billion out of total economic losses from natural disasters of $380 billion. (To give those figures a context, the Australian government’s total revenue in 2010‒11 was $283 billion.)

A similar upward trend is apparent in plotting natural disasters in Australia.

The cost to the insurers and reinsurers of such events varies, depending where they occur. Some have argued that the increase in insurance pay-outs is attributable mainly to social and demographic changes, such as the growth of coastal cities and rising property values. That can be seen in the Sydney hail storm of 1999 or more recently the hail storm in Brisbane at the end of November: the Sydney event remains one of the most expensive for the insurance industry in Australian history at $1.7 billion, while the current cost of the Brisbane event is slightly over $800 million. (The most expensive event to date was the 2010 Queensland floods at $2.3 billion.) For the actuaries this is not an issue, in the sense that it is a given that must be taken into account, but it does concern them that, in the various climate change scenarios, catastrophic events may occur more often in major urban areas and that cyclones may move further south, bringing them within range of Queensland’s heavily populated and built-up south-east corner.

IAG in Australia is now utilising climate science figures that suggest that a 1°C increase in mean summer temperature will increase the risk of bushfires by 17 to 28 per cent; an increase of 2.2°C will cause a 5 to 10 per cent increase in cyclone wind speeds; that a 25 per cent increase in the volume of rain over short periods will mean that what is currently viewed as a one-in-100 year flood could become a one-in-36 year flood or, at worst, a one-in-17 year event.

The actuaries are also concerned that small changes created by climate change will not cause a proportional increase in damage (and insurance costs) but an exponential increase: for example, a 25 percent increase in a storm’s peak wind gusts from 40‒50 knots to 50‒60 knots does not produce a 25 per cent increase in damage but a 650 per cent increase. (For those who are metrically minded that is an increase from 74‒93km/h to 93‒111km/h.) It means our current housing stock is not well-suited to such an increase in the intensity of storms and that poses major challenges for insurance companies.

Terms like 1-in-100 year and 1-in-200 year will become meaningless as events of that magnitude occur on a more regular basis. In the UK [page 21 of link], it has been estimated that the insurance industry would require additional capital of £1 billion to cover 1-in-200 year flood events if there is a temperature rise of 2°C but £5.5 billion if there is a 6°C rise in temperature (the upper end of IPCC forecasts). To cover costs, it was also estimated that insurance pricing in the UK would need to increase by 16% for a 2°C rise and 47% for a 6°C rise. Those figures illustrate how the actuaries are examining the risk posed by both the high and low range climate change forecasts.

Insurance companies and their actuaries are not concerned merely by the local risks from climate change. The linkages between insurance companies created by reinsurance mechanisms means that they can each be affected by catastrophes anywhere on the globe. For example, the price to insurance companies of reinsurance almost doubled after cyclone Andrew in the US in 1992 (because that one event accounted for about 40 per cent of the then globally available capital for reinsurance) and it was three years before the price began to decline again.

The associated danger is that the cost of insurance becomes too expensive. More and more individuals may not take out insurance to cover their assets. In 2002, $1,500 billion of Australia’s wealth was locked up in homes, commercial buildings, ports and other physical assets. IAG’s Chief Risk Officer has stated:

The insurance industry currently underwrites the risk to the bulk of these assets from weather events but climate change threatens its ability to do so as effectively in the future. Therefore the affect to Australia from climate change is quickly becoming a social, economic and political issue.

The worst case scenario is that insurance companies themselves fail from the increasing insurance ‘losses’ and the rising cost of reinsurance, leaving people and businesses with no market mechanism to protect assets. In economic terms, ‘insurance’ is a means of spreading risk but if premiums become too expensive or insurance companies fail, the government will become the ‘insurer’ of last resort, as the main body able to spread and absorb the risk — but at what cost to taxpayers?

There is already some talk of greater government involvement. Following the 2010 Queensland floods the then Assistant Treasurer Bill Shorten announced the Australian National Disaster Insurance Review. The Review’s final report included recommendations for:

    • the creation of a government agency* to manage national coordination of flood risk management and to operate a system of premium discounts and a flood risk reinsurance facility
    • all home insurance policies to include flood cover
    • a system of premium discounts in order that most purchasers of policies in areas subject to flood risk are eligible for discounts against the full cost of flood insurance
    • a government guarantee for claim payments
(* A similar body had been created by the Howard government after the ‘twin towers’ terrorist attack to provide a government guarantee as regards terrorism insurance.)

The government response to most of the recommendations was, however, that it would ‘consider’ them as part of a broader consideration of disaster insurance changes, following a consultation process in 2012. Apart from action on the definition of what constitutes a ‘flood’, I am not aware of other government steps on this issue. One aspect that appears to have held up government action is that many insurance companies continue to operate on neo-liberal market principles and oppose government involvement:

In July 2011 Lloyd’s made it clear to the Review that government intervention in private insurance markets should be kept to a minimum and warned that the creation of insurance programmes or pools limits the effectiveness of the insurance industry, can be hugely costly for governments and hampers the application of sound actuarial and risk-based principles.

It is almost inevitable that in future years (despite Lloyd’s current approach), there will be more discussion of the government’s role in insurance. If the actuaries’ figures are borne out, the cost of insurance could become prohibitive either for the individual or for the insurance companies, or both. Alternately, governments have to be active now in taking measures to adapt to and mitigate climate change that will help contain future costs.

Actuaries are already speaking of the need for adaptation and mitigation. A simple example is ensuring that buildings in cyclone-prone areas are built to cyclone standards. Here in Australia, the actuaries are using the evidence that recent cyclone damage has been greatest to dwellings that were not built to such standards or, in some cases, where such standards were not enforced during construction. Taking action now may help avoid the high range climate change scenarios and the associated higher costs: not only insurance costs, but the construction costs of more stringent cyclone standards to cope with higher cyclonic wind speeds. The draconian alternative is abandoning some of the towns and cities that are subject to cyclones.

IAG has suggested that insurance companies can drive public awareness programs that identify vulnerable areas, can lobby governments to change or enforce building codes, and, in relation to emissions, can offer lower vehicle insurance premiums for those driving fewer kilometres. Insurance companies are also funding research to more clearly identify the risks they face. IAG is funding research into the development of hail storms over Sydney: warmer waters appear one contributing factor, so the risk is, if oceans warm as predicted, that those events will become more frequent.

Despite the need for adaptation and mitigation, last December we saw Queensland minister Jeff Seeney order the Moreton Bay Regional Council to remove from its regional plan reference to a climate change-derived sea level rise of 0.8 metres by 2100. The Local Government Association of Queensland feared that Seeney may enforce that for all coastal councils in Queensland and was seeking legal advice. The concern is that councils may be legally liable, like tobacco and asbestos companies, if it is shown that they knew of the risk but failed to act.

Seeney claimed he intervened ‘to ensure the residents’ rights to build and develop their properties were maintained and not restricted by their local council’. That relates to issues I discussed last year on TPS regarding the Right’s view of individual freedom and individual self-interest. And it manages to ignore completely the growing concern of the insurance industry and its actuaries.

The actuaries are also discussing the risk related to the market value of companies holding carbon (fossil fuel) assets. The argument goes like this:

    • to limit global temperature rise to 2°C we have a ‘carbon budget’ of 886 gigatonnes of CO2 between 2000 and 2050
    • in the first ten years of the century we have used 321 gigatonnes of that budget, leaving 565 gigatonnes
    • but known global reserves of carbon fuels would produce 2,795 gigatonnes of CO2
    • top listed companies represent around 25 per cent of those reserves
    • so what happens to the companies’ value if only 20 per cent of carbon fuel reserves can be used?
In economic terminology, these would become ‘stranded assets’ — assets that can no longer be used. That has implications for companies and the share markets. Insurance companies are particularly concerned because they rely on investments to help build their funds, so they need to reduce such risk in their investment portfolios. Actuaries who provide advice in those areas are starting to factor such considerations into their advice.

Insurance companies are recognising that a risk from climate change already exists and, whether convinced by the science or not, are asking their actuaries to assess that risk. They are acting on the precautionary principle — expressed this way by a Swedish insurance company:

Climate change has been a hot topic for a long time now. Global warming is probably contributing to many of the changes in our weather. Whatever the reason, the conclusion is that we have to respond to the situation more effectively. [emphasis added]

It’s a shame that we can’t say the same of our government, although it is likely that the government will be the one left to pick up the tab if the insurance companies can no longer meet the cost of weather events arising from climate change. Someone should ask Mr Abbott and Mr Hockey what sort of debt and deficit disaster that will create for future generations.

What do you think?

About Ken Wolff

This week Ken takes a different look at climate change and suggests that Tony Abbott, and other climate science sceptics like him, should instead consider the risk assessment of the actuaries. The government may be taking no notice of climate change but the insurance industry certainly is.

Next week we start a series of articles on financial matters, starting with another piece by Ken, 'Abbott continues to tell porkies', which examines the detail of the so-called budget deficit disaster and asks why Abbott and Hockey did not also consider other tax changes, particularly regarding 'tax expenditures'. It will be followed by 2353 examining the issue of tax reform and why it is so difficult.

We’re all in this together

As human beings we each have a responsibility to care for humanity. Expressing concern for others brings inner strength and deep satisfaction. As social animals, human beings need friendship, but friendship doesn’t come from wealth and power, but from showing compassion and concern for others. [Dalai Lama]

It is common to make a resolution on New Year’s Eve that, if kept, will make us better people in the forthcoming year. It is also a period of reflection, of things we did well, things we could have done better and things that we just should consider — so with your indulgence, and as New Year’s Eve was only a few weeks ago, I would propose that we should all reflect on this quote from the Reverend Tim Costello (Baptist Minister, CEO of World Vision and brother of former Australian Treasurer, Peter), and that we should all aspire to it in 2015.

Ultimately we have got to co-operate for our common destiny.

If you’re reading this site you’ll probably remember that back at the beginning of November, the Memorial Service for past Prime Minister Edward Gough Whitlam was celebrated at the Sydney Town Hall. As you would expect, all the living Prime Ministers attended the service — and the public outside did not greet Prime Ministers Howard, Rudd and Abbott with any enthusiasm. Regardless of our opinions of the three gentlemen in question, it is my contention here that the treatment they received outside the Hall was inappropriate for three past and current leaders of our community. True, once inside, Abbott gave the impression he was there only because he ‘had to be there’, when speaker after speaker was pointing out the legacy left by Whitlam, so he was equally at fault.

Oliver Burkeman, writing in the US version of The Guardian opened a recent opinion piece with the headline ‘We can all get along — and for less than the cost of a Taylor Swift Album’. While Taylor Swift may not be your preferred musical choice (she certainly isn’t mine), the article asks why people ‘hate’ those with a different viewpoint. Burkeman looks at a recent study by the National Academy of Sciences of the United States of America that set out to look at the reasons for intractable disputes:

Political conflict between American Democrats and Republicans and ethnoreligious conflict between Israelis and Palestinians seem intractable, despite the availability of reasonable compromise solutions in both cases. This research demonstrates a fundamental cognitive bias driving such conflict intractability: Adversaries attribute their ingroup’s actions to ingroup love more than outgroup hate and attribute their outgroup’s actions to outgroup hate more than ingroup love. This biased attributional pattern increases beliefs and intentions associated with conflict intractability, including unwillingness to negotiate and unwillingness to vote for compromise solutions. In addition, offering financial incentives for accuracy in evaluating one’s outgroup mitigates this biased attributional pattern and its consequences. Understanding this bias and how to alleviate it can contribute to conflict resolution on a global scale.

In other words, can people be convinced to ‘see the values of their enemies’? Well it turns out that the answer is yes; people can gain an understanding that the motives of their ‘enemies’ are usually the same as their own motives but they come from a different viewpoint. Where the Taylor Swift comparison comes in is that when interviewing Americans about their hatred of the Republicans/Democrats (as applicable), it only took $12 — less than the cost of the aforesaid Taylor Swift album — for the interviewee to be able to describe the motivation behind those from the other side. Yes, the potential to gain $12 may demonstrate a number of human failings rather than an opening of awareness but maybe some of the interviewees actually did begin to question their rationale that the other side is completely wrong.

Burkeman links in his analysis to the writings of Arnold Kling who wrote The Library of Economics and Liberty and suggests:

The following thought occurred to me recently. Suppose we look at writing on issues where people tend to hold strong opinions that fit with their ideology.
Such writing can
(a) attempt to open the minds of people on the opposite side as the author
(b) attempt to open minds of people on the same side as the author
(c) attempt to close minds of people on the same side as the author
So, think about it. Wouldn't you classify most op-eds and blog posts as (c)? Isn't that sort of pathetic? Here are some more thoughts:
1. The default is (c). If you are not consciously trying to do (a) or (b), then you will almost surely do (c).

Burkeman then acknowledges:

Indeed, an awful lot of opinionating, in the media and elsewhere, just takes the hate-based motivations of the other side as given. The real purpose of such writing — and I’ve done plenty of it myself — is rarely to change opponents’ minds. That kind of project would surely benefit from accepting the possibility that those opponents think of themselves as decent, loving people. Instead, it’s to rally the existing supporters of one’s cause, reinforcing their perception of the other side as driven by hate.

This line of reasoning could support the motives and operations of various media ‘personalities’ and politicians both here and overseas.

Abbott became prime minister through unfailing negativity. In opposition:

They focused like a laser beam on any action by the Labor government that could be effectively attacked. It was primarily a negative opposition, with the biggest promises being the undoing of Labor’s legislative and infrastructure agenda. Abbott opposed the NBN, the mining tax, the carbon price, poker machine reform and much more.

However, in government, this process has now come back to bite them badly.

It’s almost universally agreed by economists and policy experts that a carbon price, through a tax or trading scheme, is the most effective and efficient method for reducing emissions. Julia Gillard opened herself to attack over the carbon price because of her promise during the election campaign that there would be no carbon tax under her government. The Coalition leapt on this broken promise and attacked the Gillard government relentlessly.

Gillard didn’t sell the ‘carbon tax’ well. One could argue that NBN, Disabilitycare and a number of other policies were sold equally as badly by the ALP under Rudd and Gillard. The continual infighting made known to the public through leaks didn’t help promote a sense of unity and purpose. Abbott’s relentless attacks on those policies now puts him in a position where he can’t offer the ‘effective and efficient’ method to reduce carbon emissions, neither can he offer the ALP’s technically superior NBN, the more cost effective ‘paid parental leave’ or any form of increased assistance for those with a long term disability. Hate politics has gotten in the way of good policy — and you and I (as well as our descendants) will suffer. Abbott now calls for mature debate surrounding increasing the GST — something that he claimed was ‘off the table’ while in opposition. When Clive Palmer is literally laughing at Abbott and even NewsCorp is reporting the request with some sarcasm, Abbott has a problem. Kaye Lee discusses Abbott’s conundrum on The Australian Independent Media Network by pointing out some of the other revenue-leaking measures Abbott has promised not to touch, despite being unfair to large sectors of the community.

In November, Senator David Leyonhjelm who is an independent, wrote an opinion piece for The Guardian headed:

‘Dear Bill Shorten: you're the opposition leader, not me. It's time to drop your soft bipartisanship.’

Rather than oppose for the sake of opposing, or donning a hi-vis vest and walking into some unsuspecting factory with a media circus in the manner of Abbott while he was in opposition, is Shorten playing a longer game here? If he is less ‘absolute’ now, he will be more able to determine the best practical policy outcomes in the future, assuming the opinion polls are correct. A search of The Guardian or Fairfax Media’s websites will show a list of items where Bill Shorten is actively and publically differentiating his party from Abbott. Some of his speeches have been (in the words of Yes Minister) ‘courageous’ — such as his speech at the Christian Lobby’s convention that he is in favour of blended families and same sex marriage.

Professor Selena Bartlett from QUT has developed a ‘brain vitality index’, which she hopes will become as well known as the BMI used as an indicator of physical health. Bartlett claims

“Often we are not aware of what we are saying to ourselves or the impact this has on our brain health,” she said.

“Your brain is a massive computer. If you get up in the morning thinking ‘I'm sad’, or ‘I'm worthless’, it's like entering a search for 'worthless'.

“Your brain then sets about finding the evidence to support these thoughts and so the whole negative feedback loop becomes part of your brain's hardware.

“Our brains hold onto negative thoughts more than positive thoughts and if we maintain and reiterate endless negative self-narratives it causes stress.”

Bartlett’s research puts a scientific and peer reviewed foundation to the writings of Kling and Burkeman discussed above. She also has a free ‘app’ on the Apple and GooglePlay download ‘stores’ should you wish to ‘measure’ your brain vitality.

At the end of the day, Tim Costello is right: we do have to co-operate to survive. No one person or group of people has all the correct answers. So why is it that there are a number of people prepared to tear down not only the opinions of those who haven’t come to the same conclusion, but tear down the person as well? Burkeman, Kling and Bartlett all demonstrate from different perspectives that negativity is a dangerous weapon. Bartlett also demonstrates that negative opinions are harder to ‘modify’ than positive opinions.

It is frequently said that people go ‘into’ politics because they have a genuine desire to improve the lives and outcomes for their community. Those who meet a politician from ‘the other side’ also frequently express that they seem to be nice people who are genuinely interested. Why then did it become acceptable for political parties and their acolytes to engender hatred of ‘the other side’ for political gain?

At the end of the day, no one gets off the earth alive and we need to be able to understand that others may have differing opinions developed through a similar reasoning pattern as our own. Surely as a society we have the ability to disagree with a person’s ideas or motives — but not hate the person.

What do you think?

About 2353

As the first ‘official’ post for the year (not counting our ‘warm-up’ or the announcement of changes for TPS in 2015 during the week), 2353 has asked whether we can in this new year be more understanding of opposing views, whether people can disagree with an idea without attacking the person holding it. It is an aim that all should strive for in 2015, including our politicians. Then we might have some genuine public discourse on ideas for Australia’s future rather than political name calling. We can only live in hope! Come back next week for: 'If you doubt the scientists, what about the actuaries?' by Ken Wolff

Enjoy a new era at The Political Sword

On Saturday, 13 September 2008 Ad astra wrote: ‘This is the first posting of The Political Sword blog. Its focus is Australian politics. It is intended to give expression to those who have opinions about contemporary political events. In particular it will provide a forum for exposing deception among politicians, bureaucrats and commentators.

‘The people deserve to know the truth about political decisions, how and why they were made, and about those who made them. They are entitled to know if political commentators are truthfully representing the situations they are reporting, and that they make clear what is fact, and what is opinion. They owe it to their readers to validate the facts they report and reveal their source.

‘By challenging politicians and commentators to stick to the truth and to justify their words and actions, it is possible that the quality of political discourse in this country might improve. The Internet provides ordinary citizens with the opportunity to influence political behaviour between elections, rather than only at election time.

‘Politicians, journalists and academics read political blogs - they are bound to be influenced by them, at least to some extent.

‘Al Gore said that political blogs have become a significant new force in political debate and decision making in the US. The same opportunity exists in this country to put politicians and commentators to the verbal political sword

Over six years later, the words apply even more than when they were written. Blogs and social media now do impinge on politicians; sometimes the politicians do hear what the ordinary person says and sometimes they do respond. But their honesty and their transparency has not improved; indeed it seems to have deteriorated, most noticeably since the 2013 election.

When in September 2013, at the same time as Lyn, who provided TPS users with comprehensive links to political material day after day for many years, Ad astra decided to step back from TPS, Janet (jan@j4gypsy), not wanting to see it disappear, moved in and organised a team that has maintained the site ever since. In Ad astra’s words: “Her organisational skill, and the dedication of TPS team members have been outstanding. They have authored, sought other authors, reviewed, edited, and coded countless pieces that have appeared week after week on TPS.”

Over time the nature of our author contributions has evolved. In recent months, the emphasis of most pieces has been on the philosophical aspects of politics, with a focus on economics. The pieces have been learned treatises on the chosen subject, well researched and referenced with many links, fascinating and valuable reading that has evoked reflection and deep thought about the matters that influence politics profoundly. Because these matters are seldom addressed by politicians in their discourse with the public, and are usually neglected by mainstream media journalists, the electorate has been left to flounder in a sea of inconsequential superficiality, devoid of thoughtful consideration of the central issues that influence, and indeed mould our democracy. So important have these pieces been, that it is planned that such contributions shall continue to be the solid base upon which TPS will continue in 2015. You can look forward to more of such pieces from our talented authors.

Casablanca took over from Lyn, and since then has supplied a continual stream of links to important material from the media. Her dedication and perspicacity in selecting relevant items is deeply appreciated. You can look forward to her contributions in 2015.

As we enter a new year and contemplate the 2016 election in about eighteen months, as the substandard performance of the Abbott government continues, and as its leader’s performance declines by the day and his public approval sinks to greater depths, the need has become more and more pressing for incisive commentary on the government, its leader and its ministers, as well as on what the other parties are doing.

TPS Extra

To this end, TPS has added another component to its repertoire: TPS Extra. Older readers will remember how curbside paperboys in another era shouted: ‘Extra, Extra, read all about it’ as they spruiked editions of their newspaper that contained startling news. TPS Extra is TPS’s attempt to bring you the startling — in political commentary. We will not be generating news; there are countless news generators, and we don’t have the resources anyway. What we will be doing is dissecting the contemporary news from many sources, analyzing it, looking for meaning in the events, and interpreting what they might imply. We will provide links to the news sources and will often quote from them. The pieces will therefore be opinion pieces. They will reflect the opinion of the author, and they will invite your opinion.

It is our intention to post such opinion pieces on TPS Extra. There may be several in one week, or none at all, depending on what is happening politically. You will be able to read these by switching from the main site, The Political Sword, to TPS Extra. 'Buttons' have been provided on each site to enable you to switch from one to the other and back again as often as you wish.

Our Webmaster, who goes by the nickname Web Monkey, has skillfully designed the new site and the transit buttons. We are deeply indebted to him for his stylish design.

TPS Extra is now live at There are several posts there: four prepared last week to trial the new site, and one added this week that comments on Australia Day . You may wish to read them, comment upon them, and rate them. Commenting and rating are done just as on the main TPS site.

We suggest you make the original TPS site your default, and switch to TPS Extra as the desire takes you.

We trust you will enjoy the variety now offered by The Political Sword in its two forms.

While the main TPS site will continue to focus on more in-depth analysis of political and social issues, we are also making some minor changes in our approach for 2015.

A call to authors

The Political Sword will be accepting shorter pieces from authors for posting. Last year, our posts were usually around 2000 words (give or take 200‒300 words) but this year we will accept shorter pieces, anything from 400 to 1000 words. So if you have been reading our posts thinking you couldn’t write longer pieces like that, now you don’t have to. When we receive shorter pieces, we will attempt to put pieces addressing the same topic together and post them together: so instead of a single article constituting a post, we may have two, three or four articles.

To help you, we now also have a list of themes. This doesn’t mean that they are the only things we will post about but we do hope to address a number of them during the year and your pieces, both short and long, will help.

Our current themes are:

  • education
  • health
  • environment/climate change
  • immigration/asylum seekers
  • economy
  • social equity
  • tax
  • finance
  • work and the labour force in the 21st century
  • welfare
  • Aboriginal and Torres Strait Islander affairs
  • science, research and innovation
In addressing the themes, we will not only be looking for critiques of the current approach taken by the government but alternative approaches that may actually help improve the situation or approaches that you think Labor could take into the next election. Of course, some of the themes can overlap.

And, given our authors’ statement of beliefs (see below), there is also scope to ask them to expand on some of those beliefs and explain how they see our society achieving the ideals they have listed.

About our authors

We are also introducing a new feature: ‘About our authors’, for both TPS and TPS Extra. We all have our beliefs, our vision of the sort of country in which we want to live, and of course our biases. So that you can see where our authors are coming from as they write, a short bio and a longer statement of beliefs will be provided for you to read about each of them, all at the click of your mouse. To read about our authors, click ‘About our authors’ which you will see in the left panel immediately below ‘AA's Top Political Websites’.

During the year, each author will be asked to provide a short ‘bio’ and a statement of beliefs. A short ‘bio’ from each author will be necessary, but the statement of beliefs is optional, although we do think it adds to our readers’ understanding of the author’s position and approach.

As always, your feedback will be welcome as regards both TPS Extra and the approach on TPS.

The TPS Team

Be sure to come back on Sunday evening for our first main post of the year: ‘We’re all in this together’ by 2353.

Proud to be a bigot: a view from the barbie

Everyone knows about George Brandis’s now famous comment:

People do have a right to be bigots, you know. In a free country, people do have rights to say things that other people find offensive or insulting or bigoted.

I have decided to take him at his word and tell Tony Abbott to eff off back to where he came from. He arrived here as a £10 pom and I will willingly refund his £10 (or $20 in real Australian money) if he takes the next boat home — perhaps we can spare him an orange life boat for the journey. Why wasn’t his boat stopped at sea and turned back? Given what he is doing to Oz, he must certainly rank as an ‘undesirable’ immigrant.

Yes, before the conservative critics start pointing out that Julia Gillard was born in Wales, in my bigoted view someone born in Wales (or Scotland or Ireland) ranks considerably higher than a conservative wanna-be toff born in England. If you doubt my ‘wanna-be toff’ comment, why did he re-introduce Knights and Dames into the Order of Australia? We got rid of those stupid, meaningless titles years ago but obviously a pom like Abbott still thinks they are important to Oz — where’s he been for the past 30 years? Perhaps he is hoping that one day one of his successors will offer him a title for all the great work he has done. But I’m not sure where he thinks this ‘great work’ will be done: it’s certainly not here in Oz going by his current performance.

Why do we need a pom running our country? He’ll only ruin it. Sorry, he already is, as James Wight pointed out so well in his piece here on TPS.

Although he may have arrived here as a kid (and I mean that in both senses of the word because in my humble view he is a goat), he doesn’t seem to really understand this country. I don’t know what he was doing when growing up out here but it certainly wasn’t in any way, shape or form giving him a genuine understanding of the Australian way of life. I haven’t seen him at the pub.

He pretends he is one of us but he tries too hard. Who else but Abbott still appears on the beach in budgie smugglers? Anyone who does is up themselves, thinks they are Adonis, or god’s gift to women — in my blatantly bigoted opinion, that fits Abbott to a tee. He walks with an exaggerated swagger — ‘look at me, look at me’, it says, ‘ain’t I the best thing since sliced bread’. He is a ‘big head’ and that is un-Australian. He seems to think he deserves to be a Knight, or perhaps a Lord, who can tell the rest of us what is good for us — as long as it is also good for him and his up-town mates. Sorry (again), he’s already doing that as well.

He bicycles. He jogs. He is a member of the volunteer bush fire brigade, at least when it presents a photo opportunity. He is a member of a surf live-saving club but you wouldn’t think so the way he treats the rest of us. There are plenty of others doing those volunteer jobs who never make it onto the telly and they deserve all the praise and credit they get but when someone turns up for the photo that will appear in tomorrow’s papers, you have to ask yourself: is this bloke for real?

And he sleeps with the police! What sort of bloke sleeps with the police and doesn’t go home to his missus? Yeh, I know that they’re repairing the Lodge but they rented some posh place for him and his family — $3000 a week as I recall: I wouldn’t mind earning $3000 a week, let alone being able to afford pay it as rent. Why didn’t he take that place and have his wife with him? Doesn’t she want to be with him? Perhaps she had enough of seeing him every day during the 2013 election campaign. Yeh, that was different. He didn’t want to sleep with police then. He wanted his missus in every second picture then — and his daughters. Where is she now? Have you seen her recently? — other than in Abbott’s Christmas address, and then she looked very uncomfortable. I don’t doubt that they’re a fairly normal family (as ‘normal’ as any family can be) but, gees, I can’t figure it out.

He thinks women should be at home doing the ironing. Yeh, sometimes I think that wouldn’t be too bad. Would save a lot of money with the child-minding. But we wouldn’t have a home for the cheese and kisses to do the ironing in if she didn’t work. And I don’t need a whingeing pom telling me or the missus what she should be doing. He’s the one who’s making it harder for us to survive without the missus working, and now making it harder even when she is. He’s supporting the top end of town and our wages now aren’t even keeping up with inflation. Does he expect we should thank him for that — pig’s a*se! (or ‘ass’ as the septics would say).

I thought he said he would govern for all Australians but so many are missing out now. What happened to the Oz we knew where we looked after each other; where we did try to give everyone a fair go; when the government helped people who were down on their luck; when the government actually supported our local industry. Now if a factory decides to go to India or Vietnam, or some other cheap place, all the men and women under 30 who lose their jobs won’t get a cent for six months. Don’t tell me that’s fair! Yeh, there might be a few bludgers avoiding work but that’s no reason to take it out on everybody else who genuinely needs a hand. It’s more likely to make it harder to get a job.

He promised that abolishing the carbon ‘tax’ would help us with our cost of living and that it was his major achievement for women. I’m sure every woman in the land has thanked him for that! Yeh, there was a bit of a reduction this year but it’s a one-off. It will disappear in no time because electricity prices are still going up. And isn’t he worried about the kids? What sort of planet are we leaving them unless we do something about climate change? He can talk about it all he likes but he isn’t doing anything! He’s off in la-la-land, off with the fairies at the bottom of the garden and there’s no such thing as climate change in that garden.

He also promised ‘no surprises’ and it really was no surprise when there were surprises. Why can’t politicians ever tell the truth? We all know now that whenever a conservative government is elected, it will immediately drop most of its promises (that they made to us to get elected in the first place) and blame the previous Labor government for leaving a financial mess. It’s become a game and is so predictable: yet, as voters, we go into elections with the hope that, this time, they might actually keep their promises. They don’t have to look very far to realise why we don’t trust them anymore.

Abbott reckons he hasn’t broken any promises. He says we weren’t listening carefully enough to what he said. You can’t understand a pom at the best of times let alone when one like Abbott is twisting words to suit himself. How are we supposed to know what he means when half-the-time he doesn’t seem to know himself? And he takes so long to get a sentence out that we’ve given up listening before he’s finished.

Then he tried to big-note himself on the world stage. What a joke! He said he wanted to ‘shirtfront’ Putin. I bet that had the Russians quaking in their boots: more likely rushing to their dictionaries to find out what the hell he meant. Somewhat loses its effect, don’t you think, if the other bloke has to look up a dictionary to find out what you mean before you thump him.

Like Howard before him, he reckons that any job is better than no job. He would say that, wouldn’t he, when he’s never done a day’s labour in his life. He wouldn’t even have a parliament house to swan about in if it wasn’t for hundreds of labourers who built the place! But look at how he treats working people. He seems to think he’s lord of the manor and we are just his serfs — well, serfs for him and his mates. They think they own us and we should be happy that they’re providing work for us, even if some of them (and I won’t mention names) think we should be working for $2 a day.

Abbott wants to bring back Workchoices — under a new name of course because his mob ‘buried’ Workchoices years ago. They might have taken it off life-support but it didn’t die. He wants more individual work contracts — no awards and conditions just what the lord of the manor is willing to give you. It’s a bit hard to fight back on your own but that’s Abbott’s pommy world. And you’ll be arrested for poaching, for trying to get a feed for your kids. I can foresee it all.

The rest of his mob may not be poms but they’re just as bad. Foghorn Leghorn and Schwarzenegger having cigars when they handed down their budget that attacked working people and the poor. It reminds me of an old Irish song, ‘The rocks of Bawn’ and the lyric:

Come all you loyal comrades wherever you may be
And don’t hire with any master ‘til you know what your work will be
For you must rise up early from the clear daylight of dawn
And I know you’ll never be able to plough the rocks of Bawn

A curse attend you Sweeney for you have me nearly robbed
A-sitting by your fireside with your dudeen in your gob

(A ‘dudeen’ is an old Irish clay pipe.)

It all fits doesn’t it? And shows that the poms like Abbott haven’t really changed. They kept the Irish down. They kept the Irish in Australia down in the early years. And they keep the workers down. They want us to do the impossible, like ‘plough the rocks of Bawn’, while they sit there smoking their cigars. And you wonder why I’m bigoted!

I can finish with some fine English words that a wanna-be toff like pommy Abbott might understand: ‘You and your toffs, just naff off back to Eton’.

What do you think?

TPS presents this piece as a warm-up for the year ahead, just to get us back into a politcial frame of mind and boost the political spirits.

Our first serious post for the year will appear next Sunday. But watch out later in the week for a special post about some changes for TPS in 2015.

And that was . . . 2014

Welcome to 2015. Happy New Year from The TPS Team.

Traditionally The Political Sword tends to avoid too much politics and media bashing in January as in reality Australians are more interested in the beach, cricket, being with friends and complaining about how hot/cold/unusual the weather is. While it would be easy to write a piece about the less than impressive record of the Abbott Government, there are other sites already expending much effort on this — some examples are here and here — and in any event Ad Astra foretold the reality in 2012 but boasting of TPS’s past achievements in the first post of the year is not a good look! However we digress.

It’s often said that a week is a long time in politics. While the daily news cycle gets faster and less detailed, let’s look back at 2014 and see if there really was that much change in Australian politics during the year.

The newly minted Abbott Government came to power late in 2013 in part by pointing out that the leader of the other side of politics was either a liar or so controlling his supporters had to sack him. The federal government opened 2014 having to put out a minor bushfire over who was really running the country, the elected politicians or the Prime Minister’s Chief of Staff, Peta Credlin.

Senator Abetz told a Senate estimates hearing last week: "At the end of the day it was decided by the Prime Minister as to who would be appointed to my ministerial staff and to the staff of my ministerial colleagues,"

As revealed by Fairfax, Ms Credlin has insisted that all 420 government staff appointments right down to junior electorate officers are approved by the panel.

The ‘axing’ of the ‘carbon tax’ was a work in progress early in 2014. Despite promising that the repeal of the carbon pricing scheme would be one of the first actions of the Abbott Government, reality hit when it didn’t pass the Senate. Abbott had to wait until the Senate changed to get a ‘watered down’ repeal of the necessary acts of parliament through with the assistance of Clive Palmer’s Palmer United Party. Various utilities are now passing back the ‘savings’ that were made by the repeal of the ‘carbon tax’. When Ipswich City Council in Queensland recently announced that a refund to ratepayers would be paid just in time for Christmas and average $14.04, the response was rather underwhelming according to the Queensland Times:

Carla Kompenhans posted: "$14; early Christmas present? Are you serious? I don't know anyone who would be excited about that.

"What part of Christmas will that cover exactly?"

In 2014, Australia was the ‘Chair’ of the G20 Group of Nations; consequently the Finance Ministers’ meeting was held in Cairns and the Heads of State meeting held in Brisbane during the latter part of 2014. The leadership of the Australian government (Prime Minister Abbott) was also keen to keep climate change off the agenda at the G20 meetings — much to the concern of the Europeans. With China and the USA announcing an agreement to actively reduce carbon emissions by up to 28% below 2005 levels on the Wednesday prior to the G20 Heads of State meeting, the subject was never going to go away. Widely reported was Obama’s speech to University of Queensland students in suburban ‘Brisvegas’ where he discussed his, China’s and the United Nations concerns about climate change and carbon emissions.

He then described the impact of climate change on Australia:

Here, a climate that increases in temperature will mean more extreme and frequent storms, more flooding, rising seas that submerge Pacific islands. Here in Australia, it means longer droughts, more wildfires. The incredible natural glory of the Great Barrier Reef is threatened. Worldwide, this past summer was the hottest on record. No nation is immune, and every nation has a responsibility to do its part.

Obama also called on the country to reduce its greenhouse gas emissions:

And you’ll recall at the beginning, I said the United States and Australia have a lot in common. Well, one of the things we have in common is we produce a lot of carbon. Part of it’s this legacy of wide-open spaces and the frontier mentality, and this incredible abundance of resources. And so, historically, we have not been the most energy-efficient of nations, which means we’ve got to step up.

Abbott’s response, as reported on the Mashable website, was less compelling.

In contrast, Abbott told reporters that the U.S. and China have a far greater responsibility to address climate change than Australia does. “China emits some 24% of global carbon dioxide,” Abbott told reporters in Canberra on Nov. 14. “The U.S. emits some 15% of global carbon dioxide. By contrast, Australia’s about 1%. So, I think it’s important that they do get cracking when it comes to this.”

Despite Abbott’s wishes, the final communiqué from the Brisbane G20 included some action on climate change. Turkey is the ‘Chair’ of the G20 in 2015 and has stated support for a number of climate measures in the past.

No recollection on political events within Australia in 2014 would be complete without a reflection on the life of Edward Gough Whitlam. It is claimed that Gough Whitlam made the ALP electable again. Geoffrey Robinson writing on The Conversation website suggested that the claim Whitlam was solely responsible for making Labor electable may be overblown:

The truth is more complex and interesting. Whitlam was a man for his time: his achievements were representative of new and old social movements, including the emerging progressive intelligentsia, feminists, non-Anglo migrants and the working class.

Robinson also observes

Like Keating or Julia Gillard, Whitlam has functioned as what cultural theorists call a “floating signifier” — a symbol whose power and significance is necessarily distantly connected to historical events. “It’s Time”, “the sweetest victory of all” and the “misogyny speech” exist in a world of symbols but are none the less real for this.

While there doesn’t seem to be a 1972 campaign advertisement for the Liberal Party online (if you find one, please post the link below the line), the performance of then Prime Minister McMahon on Mike Willesee’s A Current Affair is a stark contrast to the Labor Party’s ‘It’s Timeelection campaign and probably explains in part why the Liberal Party was not re-elected.

Fast forward to November 2014, and the Victorian state election. The Liberal/National coalition was removed from office after one term by the ALP, led by Daniel Andrews, who came from behind to win the fancy office in Spring Street. The common opinion at the previous election was that the ALP (then led by John Brumby) would retain Government with a reduced margin with the polls for the then state Liberal leader (Ted Ballieu) rising and falling in line with the corresponding falls and rises of Gillard’s ALP government in Canberra. Ballieu had won then but didn’t even last out the four year term as premier, being replaced by Denis Napthine soon after Rudd replaced Gillard. While Newman is still premier of Queensland, there seems to be a concern within the ranks of the LNP that Newman may also lose his seat and the LNP lose Government early in 2015 when the next Queensland election is due. The Abbott government is significantly less popular than the ALP or in fact themselves when elected some 18 months ago:

In opposition, Abbott liked to say that Julia Gillard was the most incompetent and untrustworthy prime minister in Australia's history.

The voters now have decided that they have found one that's more incompetent and just as untrustworthy.

"Only half of people polled said that Abbott is competent," says the Fairfax pollster, Jess Elgood of Ipsos.

"That's lower than for any prime minister we have figures for," a data set starting with Paul Keating in 1995.

Compared to Abbott's 50 per cent, the comparable figure for Gillard four months before she was deposed was 53 per cent.

Not a lot did change in the world of Australian politics in 2014. At the start and end of the year, we have the Prime Minister’s Chief of Staff being the news rather than managing the PM’s office. At the end of 2014, there are claims of disagreements with Foreign Minister Bishop and of ruling the government with an ‘iron fist’.

The media is still leading discussion on climate change and how to manage it (with price signals — such as a ‘carbon tax’ being mentioned as an effective mechanism), and that Abbott either is changing or should change his view that ‘climate change is crap’.

Governments in various jurisdictions around the country are still not doing well in polling after they have been accused of lying or not being able to organise themselves — with Victoria changing government; Queensland’s Premier implying he will lose the significant majority won at the 2012 event at the next election; and the Federal Government some 10% behind the opposition after 18 months. Australians are still complaining about the ‘carbon tax’ — this time the small refunds that are gradually making their way onto invoices from its repeal; and the country has lost another ‘person of renown’ in the guise of Gough Whitlam.

Let’s hope that 2015 is another year of civilised discourse on The Political Sword and that the genuine nature of the discussions here spreads to other blog sites, the media and our civilisation in general. Prime Minister Hawke achieved more results through building a consensus than Prime Minister Whitlam did by trying to crash through. Please keep your hatred for the mozzie that bit you at the BBQ last week — we on this site and on this earth genuinely don’t need it.

A bit of housekeeping to conclude this piece. The TPS Team will be reducing our output for January. The ability to comment ‘below the line’ will be open all month and we invite relevant comment as usual. There will be some new commentary posted during January on an irregular schedule (so keep looking). We will return to our weekly (or better) schedule on 1 February 2015. Be aware it’s not all sitting by the pool in the banana lounge for The TPS Team, there is usually one of us sitting near the computer with our finger poised over the ‘delete’ button for those that haven’t yet lost the hatred.

Happy New Year and may all you wish for come to pass. We look forward to your continuing support and comments in 2015.

The TPS Team

A year on TPS: 2014

As we come to the end of another year, please forgive a little self-indulgence as the TPS Team discusses what TPS has achieved in the past 12 months.

It was a year in which we saw Abbott and his cronies trying to destroy the country and make us a paradise for the neo-liberals, the neo-cons and the economists that support them — and, of course, big business. We saw the worst budget in living memory and have, so far, only been saved from its full ramifications by the senate. We saw Clive Palmer appear with Al Gore to talk about the importance of climate change but, at the same time, cave in to support the repeal of the carbon price. We have seen Abbott, more through luck than design, deflect the budget issue and ‘bask’ in the glory of the world stage, taking on the Russian bear and alienating our closest Asian neighbour. He has ‘stopped the boats’ but also stopped government transparency in the process. He is undertaking more privatisation of government services and encouraging the states to do the same. Without openly saying so, he is pursuing a neo-liberal and economic rationalist agenda backed to the hilt by the IPA (and, as others have noted, he is, to a significant extent, following its ‘hit list’).

Talk Turkey has made the point numerous times about the need to keep up the fight against this government and what it is doing.

We believe TPS has been doing that but not always directly. We are not a news site, and with only a few people volunteering their time behind the scenes we could never be, so we do not react to every government announcement, no matter how bad. TPS sometimes takes a longer view, looking at socio-political issues and the political and economic philosophies that underpin this government, as Ad Astra also did at times.

We published 43 pieces during 2014 over 46 weeks: those 43 pieces actually encompassed 48 postings as we had four multi-part pieces and we also posted mid-week on a couple of occasions. We had six ‘guest’ writers during the year, now counting Ad Astra as a guest since he retired from full-time blogging, but 2353 and Ken provided the bulk of our pieces — 35 between them. We haven’t bothered counting the words but, given that most pieces are between 1500 and 2500 words in length, it would be getting towards 100,000 words. Plus all the words our friends have posted in their comments.

We didn’t ignore Abbott in our quest for wider truths and have launched attacks, both directly and with satire. We first asked whether Abbott remembered the twentieth century in his rush to take us back to some halcyon previous age; we wondered whether he was ever meant to be PM as he originally won his position as opposition leader by only one vote; we suggested he was a ‘con artist’ and questioned his Humpty Dumpty words; and James Wight exposed the extent of destruction wrought on our society in just one year. We presented ‘Tiny-er-er O’penmouth’ who morphed into ‘Tiny Napoleon O’penmouth’.

The LNP and the government more broadly were also in the spotlight in David Horton’s piece on LNP electioneering, Ad Astra’s piece on what underlay the budget, the government’s seeming blindness to major issues raised at the World Economic Forum at the start of the year, its links with the IPA, and the way it snuck through changes in its approach to climate policy during the 2013 Christmas/New Year break.

Political ethics were questioned by 2353 in several posts: he questioned the morality of using refugees for political advantage; the ethics of those who legislate hardship for many in the community but accept expensive gifts and high paid jobs requiring little work; their use of slogans and sound bites rather than taking the time actually to address issues; and asked why we allow politicians to regulate donations to their own parties when we have witnessed that self-regulation doesn’t work for industry. Twice 2353 specifically questioned the link between religious and political values asking how politicians could claim to be religious when implementing policies that clearly breach their religious morality. As Ad Astra commented, it is a brave man who addresses the religious link to politics.

As we have moved from being a ‘society’ to being an ‘economy’, we couldn’t ignore the underlying economic approach of the government and the rising inequality it gives rise to. Piketty’s work on inequality was discussed and was preceded by a piece showing how rising inequality matched the rise of the economic rationalist approach. Finally, Ken suggested that inequality wasn’t an economic question at all but the result of witchcraft (presented as some dark humour to end the year.)

It was also suggested that economic rationalism, after 40 years, may be on the wane: pieces like 2353’s on modern monetary theory and Kay Rollison’s on ‘middle out’ economics reinforced that there are new economic approaches emerging that may, indeed, lead to the demise of economic rationalism.

Kay’s piece was also presented as an alternative approach for Labor. It was one of five pieces that addressed new approaches for Labor, including the speech Ken would like to hear and Ad Astra’s letter that actually was sent to Bill Shorten.

Associated with economics, were pieces on governments’ approach to infrastructure and privatisation.

Ken presented a piece on our understanding of ‘freedom’ which, at first, may have appeared something from left-field, but it was a prelude to his discussion of the lack of freedom in the free market and the loss of social responsibility as the neo-liberal concept of freedom, embracing individual self-interest, took over political thinking.

We also briefly discussed Aboriginal affairs, the role of unions and the role of experts.

We prophesised the future with David Horton’s piece correctly suggesting that conservative governments resort to war in their quest for popularity; Ken’s piece on Abbott’s efforts to take us back in time foreseeing that coal would become more, not less, important in Abbott’s world; and 2353, in ‘The thought thief’, providing a fair reflection of what did eventuate from Pyne’s review of the national curriculum.

The one area we have been lacking this year is putting the media to the sword, other than for Jan’s two-part piece. Perhaps that is because some segments of the media now seem to be doing a better job: Abbott’s broken promises and the down-side of the budget were more widely reported (but still not so much in News Ltd papers). It has been our commenters who have continued to point out the flaws in the media’s approach, including the ABC’s attempts at so-called ‘balance’.

And throughout the year, Casablanca has continued to provide us with numerous links relevant to each post, as well as other news of the day.

We trust we have continued Ad Astra’s tradition by putting the sword to Abbott as prime minister, the government and its policies more generally, its political ethics, its political and economic philosophy, and the approach of the economic rationalists and neo-liberals that support it.

Take the time during the break to revisit some of the pieces that were posted during the year and see what you think now that the year is coming to an end and you can see how the different posts tie together. If you have topics you would like us to address in 2015 please let us know, either in a comment or in a message to the Team (the Contact tab above).

This thread will stay open until 4 January, when another piece will be posted with an extended thread, so please post any new comments and insights you may have. And, as we asked last year, please also feel free to post any video, music video or photo that takes your fancy and that you may wish to share, with a short story as to why you selected it.

Wishing all our lurkers and commenters a happy festive season and looking forward to you being back with us in 2015.

The TPS Team

Time to resurrect witchcraft

Back in 1971 I wrote my honours thesis for social anthropology at Sydney University. Its theme was a link between witchcraft/sorcery beliefs and egalitarianism in native and peasant communities around the world. Given discussion earlier this year about inequality, I believe it has a relevance.

Its principle argument went something like this:

The basic concept of egalitarianism is that everyone is equal and has an equal share of abilities and resources. Of course, in reality, this is never quite true. And in those native and peasant communities, witchcraft was a common approach to explain the differences.

It worked in a number of ways. Those who rose above the norm and those who fell below it were prone to witchcraft, either being attacked by it or accused of it. (Please note that when I say witchcraft, I include sorcery — there was a difference in the anthropological literature of the time that wasn’t relevant to my thesis nor to this discussion. Also, I use the term ‘witch’ to include both males and females.)

Those who rose above the norm could include those who were ‘conspicuously fortunate’, those who had outstanding innate talent (such as a Bradman or a Mozart), and even the ‘big men’ of the village.

For those with talent, it helped explain why they were so good but it also helped keep them within the bounds of the community. While it may only be thought that their talent was a result of witchcraft, if they did not use that talent in acceptable ways, or if they boasted of their talent, it could become a public accusation, leading to public sanction.

Similarly ‘big men’ were recognised as being important for the community, particularly in its dealings with other communities, but they had to maintain the welfare and best interests of their own community or they would also be publicly accused of being witches.

Being ‘conspicuously fortunate’ is clearly an egalitarian crime. The threat of being accused of being a witch helped ensure that those people spread their wealth in socially acceptable ways — catering for large ceremonies, for example.

Those at the bottom (below the social norm) were rarely attacked by witchcraft but prone to being identified as witches, the ones paid to provide the potions or spells. This often related to an illness occurring after an argument between two people (and the argument most often related to one person having more than the other). Both sides of the issue would then have to be addressed, the argument (and which party paid the witch), and the role of the witch.

Some of this demonisation of those at the bottom, those falling below the social norms, can be seen in the European and North American witch trials. Elderly widows struggling to survive on their own and young women perceived as promiscuous were among those more commonly accused.

I saw this operating like three concentric circles reflecting the values of the community. The majority of people fell within the central circle. Then those who were different, the probable witches, operated within the second circle. As long as they remained within that second circle they could be tolerated in a somewhat ambivalent way, but if they moved beyond that second circle they had moved too far beyond the bounds of egalitarianism and would face sanction, exile, or even execution.

I read a simple example of this in a story by Camara Laye about an African childhood. A boy was with his uncle, the village headman, and as they worked their way along a field they were moving ahead of the other men. Then the uncle slowed down and the boy pointed out that the others were catching up. His uncle told him it was not good to get too far ahead. In my terms, he was reaching a boundary where greater success (his speed working the field) would be seen as extreme and probably the result of witchcraft.

Witchcraft in this way acts as a sanction to acceptable behaviour. One tries to stay within the egalitarian norms, even if those norms are somewhat extended within the second circle, so as to avoid witchcraft.

So there you have it in a nutshell. What does this mean for our society?

We no longer believe in witchcraft but perhaps we should.

The majority of us sit comfortably in the middle (within the central circle), follow social norms, at least within acceptable bounds, and are free from accusations of witchcraft. We understand disease much better and no longer need witchcraft or other supernatural sources to explain it. Although it is interesting that arguments or disagreements and the associated stress can lead to illness — perhaps we still need witchcraft to explain that and should focus more on the argument as the root cause of the illness so that the argument is dealt with before a cure is found.

We are much better off in terms of our material possessions but still find blatant displays of wealth unacceptable. When someone builds a house twice as big as those around it, or suddenly appears in a Porsche when everyone else has a Holden or a Toyota, we no longer accuse them of witchcraft but we may think they are crooks, or dealing drugs, or something similar.

We elevate and praise our successful artists and sports people but only so long as they don’t abuse their position or become ‘big heads’. When that happens they become dangerous to our social stability and an element of witchcraft comes back into play. They are seen not to have played by the rules and need to be brought down or cast out.

We accept that we need leaders and powerful people to protect us but are equivocal about their power. We have a democracy which is supposed to control that power but sometimes we wonder whether it does. Of course, we are outraged when we find the powerful misusing their power to increase their own wealth but, after a brief time, nothing really changes and we await the next occurrence.

Our society has its share of people who drop below the norm and they are often perceived as a threat. I think sometimes it is because it is a reminder that there but for a bit of luck goes any one of us. We are not always comfortable knowing they are there but generally we wish to help them back within the inner circle. Many, however, in their day-to-day activities, will avoid them if they can.

The poor and outcast may no longer be witches but they are demonised by the rich, the LNP government and the economic rationalists: they are too lazy to be helped. We are told they use the services and taxes of the core circle and reduce the services available for the rest of us within that circle. They are told by the rich and powerful that they can never get back into that inner circle except by their own efforts, that they are undeserving of help, but that approach is not fully in accord with the egalitarian values of the central circle, so the rich and powerful are treading dangerous ground.

And we have ‘the one per cent’ sitting at the top with all their wealth. How did they get there? Where I grew up, the common view was that almost all who were fabulously rich must have done something wrong, not necessarily illegal but certainly breaching the norms — a few deals that sailed close to the edge of legality, or a few mates abandoned or ‘knifed’ along the way, a bit of insider knowledge, tax avoidance (or should I say tax minimisation so as not to be sued) and so on. Of course, only the rich have this special knowledge and the resources to implement it.

As a society we seem to struggle to find good explanations for these situations, and perhaps find some of them puzzling, even troubling, but witchcraft explains them all.

The conspicuous displays of wealth are obviously the result of witchcraft. An ordinary person in the inner circle cannot get their Porsche any other way. They don’t need to be crooks, just witches. When they know that such conspicuous displays can lead to accusations of witchcraft, they will be less likely to step so far out of line.

The same goes for our successful artists and sports people. They will behave in more acceptable ways if they know that they are always on the verge of a witchcraft accusation because of their ‘unnatural’ talent.

Our leaders may need their witchcraft to counter the witchcraft of other leaders but if they know that we know they are witches then they may be more careful how they use that power. They will know they need to support the central circle or face public accusation and the sanctions that follow.

If those who drop below the norm are thought more likely to be witches, perhaps we will work harder to bring them back into the central circle and so tame their witchcraft. And we will work to keep them in the inner circle because if they drop back again, anything could happen — we might all be turned into sheep (if the rich and powerful have not already turned us into sheep).

Alternately, we may draw on their magic to bring the rich and the powerful into line. While they are there, they are also a threat to those at the top — a reminder that the second circle belongs not just to the rich and powerful but the poor and outcast, that they are in reality in the same situation, operating outside the core values of the society. The poor and outcast have their own spells to attack the rich and powerful and it is a potential battleground for witchcraft.

Finally, how did the super-rich gain all that wealth? Bugger economics! — it was witchcraft pure and simple. They have the secret knowledge that they share only within their cabal.

It follows that they demonise and accuse those at the bottom, the others occupying those outer circles, of witchcraft because they are so conscious of it and fear being accused themselves. The rich and powerful (and the LNP) persecute these other witches to divert attention from their own witchcraft.

I say it is time to bring back witchcraft. It will support our egalitarianism and help us explain so much. We would not need economic arguments to explain inequality, just witchcraft.

We can bring back the witch trials and place ‘the one percent’ before the Witchfinder General. Then let them try to explain that they did not achieve their wealth by witchcraft. We can ask the banks and global corporations to show that, in making their super profits, they have not beguiled us with witchcraft. We can demand that the current prime minister justify his accusations of witchcraft against a certain red-haired former prime minister and, if he can’t, it follows that he, himself, was using witchcraft.

There may be many executions to follow. I think, however, that I could be tempted to become a tricoteuse at the bonfires.

What do you think?

The perils of Self Regulation

A month or so ago, The Political Sword posed the question ‘What have the unions ever done for us?’ The piece closed with a question:

. . .if there was nothing for the political right and employers to fear from the unions, why are the same groups still trying to neuter the unions’ ability to campaign and protect the perceived interests of their members in 2014 while ‘unions of employers’ are encouraged?

There are multiple answers to this question, some of which probably have some evidence behind them. One is that the union movement generally supports the Australian Labor Party — although some unions don’t, such as Together, which is primarily the Queensland public servants’ union. Naturally the support of the ALP would lead to a financial contribution: the conventional wisdom is that if the funding from unions for the ALP is diminished, the political organisation is less capable of fighting an election.

This line of reasoning has some validity but begs the question: where do the Liberal and National Parties get their funding from? Legislation in most jurisdictions within Australia put a cap on the amount of money that can be given directly to any political party without the need for disclosure. The values vary and for the purposes of this discussion aren’t important.

So you have legislation passed by politicians that regulates the donations they are allowed to accept during the course of their political careers. In effect, we are allowing politicians to self-regulate the value of cash and in-kind support garnered from the community and while some of the donations are probably altruistic, we don’t know that. Self-regulation usually doesn’t end up well. To eliminate the claims of ‘[the other side] would do that’, ‘jobs for the boys’; ‘political favours’ and so on, lets look at some non-political examples of failed self-regulation that have affected us all.

The Global Financial Crisis occurred during the late 2000s. The US Securities and Exchange Commission (SEC) imposed a $550million fine and a requirement to amend its business practices on Goldman Sachs in 2010 to settle —

SEC charges that Goldman misled investors in a subprime mortgage product just as the U.S. housing market was starting to collapse.

For more information please go to the link above. The short version of the press release, however, is that Goldman Sachs (and others) packaged up sub-prime (having less than ideal security backing) domestic mortgages that did have insurance in the case of default, claimed the resultant securities were completely backed by adequate security and sold the ‘investments’ to others. There was a loss of confidence in the stock market towards the end of 2007 causing the employment rates and demand for houses in parts of the USA to fall. That also reduced the value of houses and the underlying mortgage security, while those that lost their jobs couldn’t afford to reduce the value owing on the now depressed security value of the mortgage. So the home owners began to default on their mortgages and the mortgage security holder then attempted to claim the shortfall on the mortgage insurer. The mortgages were insured but the insurers couldn’t fund the demand on their policies and were close to bankruptcy until the US Government intervened.

The problem here was self-regulation. In the 1990’s, the Reagan Presidency had reduced the supervision of financial institutions in the USA. Staff of these institutions were ‘incentivised’ with large commissions if they made more money for the financial institution — leading them to take risks. The Reserve Bank of Australia’s response to the 2014 Financial System Enquiry discusses the GFC and claims:

The global financial crisis revealed a number of shortcomings in policies and practices at financial institutions and at regulatory and supervisory agencies, particularly in north Atlantic countries. These shortcomings included: … insufficient financial institution holdings of high quality capital and inadequate management of liquidity risk; inadequacies in basic microprudential supervision, corporate governance and risk management practices; an under-appreciation of the scale and complexity of operations at large trading banks and other financial institutions — particularly those with activities in multiple jurisdictions — and the difficulty in resolving them when they failed; inadequate oversight of over-the-counter (OTC) derivatives markets; and insufficient visibility of the extent of interconnectedness among financial institutions, including between the regulated and shadow banking sectors, and across borders.

The report then discusses the domestic and international efforts to determine the issues as well as rectify them. Amongst the responses were increased prudential requirements, better regulation and better assessment of financial risk — in short, partial re-regulation of the financial markets.

Australia did suffer some fallout from the failure of self-regulation in the financial industry during the Global Financial Crisis, as the Halifax Bank of Scotland (HBOS) owned Bankwest at the time. The University of New South Wales discusses the failure of prudential requirements and the subsequent fallout across the banking sector, the practices of Bankwest under HBOS, and the subsequent problems the Commonwealth Bank inherited when it purchased Bankwest subsequent to the GFC. Yet business finance brokers such as Mooney, Kiddle and Partners, are still questioning the need for regulation in financial markets, arguing the case that the small and medium business lending sector is being affected by unnecessary regulation.

Early this year, someone in the office of Assistant Health Minister Fiona Nash, ordered a website that promoted healthy eating, through giving packaged food a ‘star rating’ between 1 and 5, to be pulled down soon after it ‘went live’. The subsequent investigation discovered that the minister and her chief of staff were implicated in the action. Additionally, the chief of staff was married to the sole director of a firm representing a number of packaged (or ‘junk’) food manufacturers and he had worked for a multi-national packaged food manufacturer prior to his move to the public service. The Australian Consumers Association compared the ‘stars’ that would be awarded to cheese sticks, peanut butter and cracker biscuits and found that the products of one of the multi-national packaged food companies (that had been attempting to discredit the system) did not compare well. The New South Wales Cancer Council has described a number of the methods that are used to circumvent the existing self-regulation of food advertising. The Conversation carried a report in August 2013 entitled ‘Forget children, self-regulating ads only help the food industry’. In the report, Sandra Jones, a Professor and Director of the Centre for Health Initiatives at University of Wollongong writes:

Following advocacy by parent groups and NGOs (non-governmental organisations) regarding the extensive use of premiums to sell fast food to Australian children, the mandatory Children’s Television Standards were revised in 2009 to clarify that an advertisement:

must not make reference to the premium in a way that is more than merely incidental to the reference to the advertised product or service.

A review of food and beverage advertisements in five Australian cities over a two-month period in 2010 identified 619 breaches of the standards, including 120 breaches of this specific clause, and 332 breaches of the industry’s voluntary regulations.

Even ACMA (the body that attempts to regulate commercial media) has concerns about how the packaged food industry self-regulates advertising on television. Regular watchers of ABCTV’s MediaWatch would be aware of its frequent concern of the lack of real regulatory power that ACMA can wield.

No doubt parents find the pestering from their children wanting the latest ‘incentive’ to purchase a particular packaged food product annoying. They do always have the right to say no. The industry demonstrates time and time again, however, that this sort of marketing does work, despite the claims of responsible self-regulation which is supposed to prevent it. Unfortunately the disregard for self-regulation and continual marketing of what is really food that is not healthy creates a number of problems later in life. On 13 October 2014, ABCTV’s ‘Four Corners’ reported on the results of a community health program managed by the council for the City of Ararat in regional Victoria, called ‘Ararat Active City’. The program came about primarily due to the Channel 10 ‘reality’ show ‘The Biggest Loser’ making the claim that the town was the most obese town in Australia — and making a living by selling advertising surrounded by people suffering while attempting to lose weight. A lot of the stories of the participants from both the The Biggest Loser and Four Corners discussed their poor eating habits — from childhood.

Earlier this year Barry O’Farrell resigned as Premier of New South Wales when it was revealed at an ICAC enquiry that he accepted a gift of a bottle of Penfolds Grange from someone with connections to a firm that was attempting to win a Government contract. While the punishment may be excessive for the ‘crime’, why would the ‘thank you’ note have been available three years later unless there was some expectation that the gift would result in favourable treatment? Not that Barry O’Farrell was the only politician caught up in the ICAC enquiry: Eddie Obeid in New South Wales and a few Queensland politicians were also ‘mentioned in dispatches’ — although O’Farrell seems to have lost the most. Politicians make the rules around donations to political causes then appear to fragrantly breach them.

Rob Oakeshott, former NSW and Federal Member of Parliament, writing in The Saturday Paper is promoting a Royal Commission investigating political donations. He claims:

The real threat is within government itself. It is the increasing corruption of our public decision-making by influence gained through record levels of private donations. The only colour Australia needs to fear is the colour of money in its democracy. Chequebook decision-making is the silent killer of necessary reform.

Oakeshott suggests that the commission would need a period of years to properly investigate the structures used by political parties to funnel donations and writes:

We need a royal commission because the only other option is to trust “the system” to self-regulate. By leaving this long-overdue clean-up of the “corruption by donation” of Australian policy to the worst offenders — political party leadership and their respective head offices — we’ll simply fall for the same pea and thimble tricks that have added to the complexity of the current electoral laws. We’ll end up with a convoluted, short-term bag-of-trickery reform.

The claim is made that the two major political parties spend around $100 million per election and, as Oakeshott has been both in the ‘two party’ system and outside it as an independent, he probably has some evidence to support his claim. Any way you look at it, the donors of significant parts of the $100 million would probably expect some ‘return on the capital expenditure’ as demonstrated by the sudden reappearance of a thank you note some three years after it was written.

Despite the claims, it seems that self-regulation only benefits those who are supposed to be regulating themselves. Rob Oakeshott has an on-line petition to sign — available here should you choose to do so — that requests the Governor-General commence a Royal Commission into political donations and how to introduce some rigour into the system to ensure that politicians serve all those who elect them, rather than unknown vested interests.

If self-regulation is a demonstrated failure in the financial markets and advertising of unhealthy food to our children, why do we believe that politicians have greater altruistic values?

What do you think?

Not quite behind the throne

The IPA (Institute of Public Affairs) has had many words written about it, including that it may be the power behind the throne in the Abbott government. The problem is that ‘behind the throne’ usually means a shadowy or lesser known presence but the IPA is making itself anything but that, which may well lead to its undoing.

While the IPA certainly seems to be influencing the current government, one debating point is whether that is a genuine direct and active influence or merely a confluence of ideologies? Either way, it allows the government to support the IPA’s position on many issues and the IPA to claim it is influencing the public agenda.

Abbott in 2013, prior to the election, spoke at the IPA’s 70th anniversary (video here and transcript here) and in relation to its ‘wish list’ of 75 policies for an incoming LNP government openly endorsed ten of them and said: ‘that is a big “yes” to many of the 75 specific policies you urged upon me’.

Others have shown that Abbott, while definitely accepting some of the proposals, has been a little more pragmatic in adopting others or has been slow to take them too far. As with his decision not to proceed with the repeal of section 18c of the Racial Discrimination Act, Abbott may agree in principle with the IPA’s position but he is still a politician and will sometimes bow to political pressure, including public reaction, or to an inevitable political reality, such as not having control of the senate.

It is no coincidence that the IPA and Liberal Party policy are similar because Liberal members of parliament are involved in its activities and its current chairman is Rod Kemp, a former Liberal minister in the Howard government (who had already been a director of the IPA before becoming a Liberal member of parliament). Liberal power broker Michael Kroger is also on the board and one other member is also a former Liberal candidate — the other members of the board are business people. It claims to be a research organisation but there are no academics on its board, although it does have an academic Research Committee. Its approach to research, however, is anything but ‘academic’. Its Executive Director, John Roskam, says:

I’m sceptical about peer review in as much as you’re reviewed by your mates. Good analysis will stand up to scrutiny whether it’s peer reviewed or not.

The rejection of ‘peer review’ is interesting because, although designed to bring rigour to research, peer review has elements of a free market approach. It is competitive in the sense that other academics exercise their self-interest in finding flaws, if they can, in another’s work, thereby promoting their own work and their ability to ‘sell’ their own skills and knowledge. (It is sometimes when these elements dominate that the science can suffer.) If that does not follow market principles, then I’m not sure what does, but the IPA rejects it. We can only question why.

The IPA also refuses to divulge the funding for its research whereas mainstream research may be considered ‘suspect’ if funded by organisations that have a vested interest in the outcome of the research. Roskam again:

… he denies the IPA tailors its findings to the demands of the paying client. On the contrary, he says, clients come to the IPA because their concerns are consistent with IPA principles.

The IPA was founded in 1943, by big business, in response to what was seen as the threat of government interventionist social policies (also perceived as ‘socialist’ policies, remembering that Labor was in government at the time). Sir George Coles, founder of the Coles group, was its first chairman and it has been pointed out that all of its members in the early years lived in Toorak, an elite address in Melbourne.

It is also no coincidence that the Liberal Party was founded the following year: the IPA was involved and is reputed to have influenced (even provided) Menzies’ original policies. Early on it was a more conservative organisation but since the 1980s has become neo-liberal.

Although claiming to be a research organisation, its main aim appears more about getting its views before the public: in 2012‒13 financial year it claimed 878 mentions in print and online; 164 articles by its ‘researchers’ in the national media; 540 radio appearances and mentions; and 210 television appearances and mentions. I am not sure exactly what it means by ‘mentions’ — does it include critical mentions? — but it certainly appears a way of inflating the figures. Thus it claims media success in pushing its agenda. It may not be a bad thing that the IPA is now so openly pursuing its approach because, at least, it opens its arguments to wider scrutiny, rather than simply being a shadowy and secretive presence behind the throne.

Like the old union ambit claims (I’m sure it will enjoy that comparison), the IPA may not get all it wants but creates the debate and climate for the type of reform it wants. As its director for development and communications explained:

If we’re not out there arguing for the Australian Human Rights Commission to be abolished … no one is going to advance the idea of radically reforming it.

Even its approach that the ABC should be abolished as a government funded media service contributes to the ABC inviting its spokespeople to appear in the name of ‘balance’. (Although, interestingly, the IPA also wants the repeal of laws that mandate ‘balance’ in the media.) So, by pursuing a more radical agenda, it actually achieves lesser changes towards its ultimate aim.

The IPA agenda is not simply a set of policy prescriptions but a plan to reshape Australia in the neo-liberal image. Even the title of the article where its 75 policy ideas were presented clearly sets out that intent: ‘Be like Gough: 75 radical ideas to transform Australia’ [emphasis added]. The article correctly suggests that political culture moves left or right when left or right governments are elected, but claims that left governments are more successful in moving to the left than right governments are in moving the political culture and society back to the right. The article suggests that Abbott, to be successful with a free market reform agenda, must act like Whitlam and do it quickly: ‘If he hasn’t changed Australia in his first year as prime minister, he probably never will’. (As Abbott has now been in government for over a year, perhaps we can take limited comfort from that assessment.)

The IPA claims all this in the name of ‘freedom’ and perhaps garners some wider support for its positions because of that. (It had 3,383 members at 30 June 2013 and plans to have five thousand by the end of 2015.) We all support ‘freedom’ but, as with any offer too good to be true, one needs to read the fine print and find out what is actually meant.

I think more pertinent than Abbott’s speech at the IPA anniversary was a speech by Rupert Murdoch at that same event. Here are a few interesting excerpts revealing the big business and IPA defence of the free market and how they would like to shape the debate:

… we must argue the morality of free markets and the immorality of markets that are not free. The cold, commercial word ‘market’ disguises its human character — a market is a collection of our aspirations, exertions, choices and desires.

We have not persuaded people that the market does better because it is more moral — or that socialism fails because it is largely immoral in its denial of fundamental freedoms. To the contrary, too many people think that the market succeeds because it is based on a vice — greed. And that socialism is better because it is based on a virtue — sharing.

The market succeeds because it gives people incentives to put their own wants and needs aside to address the wants and needs of others. To succeed, you have to produce something that other people are willing to pay for.

[The market is] about fairness and opportunity. He [Arthur Brooks, leader of an American free market think tank] defines fairness as the universal opportunity to enjoy earned success. That means enjoying the fruits of our success.

What’s fair or compassionate, for example, about using taxpayer dollars to bail out Wall Street bankers?

What’s fair about taking money from people who have earned it and giving it to people who didn’t?

People begin to resent the rich only when they conclude that the system is rigged. To put it another way, if we wish to persuade people that income inequality is not the right way to measure the fairness of our society, we have to work to make sure that social mobility is real — especially for people at the bottommost levels of society. By that measure, we have much left to do.

Unsurprisingly, Murdoch’s approach to ‘fairness’ was picked up by the treasurer, Joe Hockey, in a speech he made to the Sydney Institute in June of this year:

In other words the average working Australian, be they a cleaner, a plumber or a teacher, is working over one month full time each year just to pay for the welfare of another Australian. Is this fair?

Whilst income tax is by far our largest form of revenue, just ten percent of the population pays nearly two thirds of all income tax. In fact, just two percent of taxpayers pay more than a quarter of all income tax. Maybe these taxpayers would argue that the tax system is already unfair.

The majority of Australians do not understand (rightfully, in my opinion) why some level of redistribution of income is ‘unfair’: the arguments that do exist are more about the extent of redistribution. Also, Murdoch’s claim that ‘income inequality’ is not the right way to measure fairness does not stand up to scrutiny. Murdoch suggests that social mobility is the answer but Piketty showed that the increasing wealth of those at the top is creating a clear lack of mobility, not just for those at the bottom (whom Murdoch mentioned), but those in the middle and upper middle income levels, who now have only miniscule opportunity to rise to the levels of wealth of those at the top (like Murdoch). Murdoch also ignores (as Piketty does not) that his children will inherit all that wealth and will not have ‘earned’ it — ‘earning’ success and wealth is meant to be central to the free market approach. If they believe that earned wealth is a key to the ‘fairness’ of the free market, why don’t they support inheritance taxes?

When Murdoch uses the words ‘greed’ in relation to the markets and ‘sharing’ in relation to socialism, although critical of that view, he actually raises a basic difference. The market is based on the philosophy of the self-interested individual and what is ‘greed’ but an expression of self-interest? Sharing is based on social responsibility and the common good. If, as Murdoch says, people do have this view, it is not some vague unwarranted feeling but a genuine value judgement based on the underlying principles. (Also noting that when Murdoch and the IPA use the word ‘socialism’, they do not mean Soviet-style socialism but almost any progressive view that suggests governments have a role to play in ensuring fairness.)

While Murdoch claims that the market represents human aspirations, my piece on the free market showed the extent to which the economic theory of the market is not based on reality at all: it is a framework supporting the property-owning classes, particularly the property-owning elites. If I lose my property I have no place in the market, no opportunity to improve my situation. I think the ultimate loss of property is someone with a severe disability who has lost their capacity to sell even their labour. What would happen to such people in a pure free market? They would be like the beggars of the past, living on the streets and probably starving.

That takes us to the different views of freedom of the left and the right as discussed in ‘Whose freedom?’. Because the right and the free-market advocates do not accept lack of means or lack of capacity as a limitation on freedom, they do not see why government needs to intervene. It is only the left or progressive view of freedom, that it should include improving the capacity of individuals to exercise their freedom, that deals with situations like the severely disabled person’s freedom in a market society.

The example of the disabled person also shows that there is still a distinction between the ‘market’ and ‘society’, a distinction that is blurred or ignored in the IPA and Murdoch view of the world. Australian society generally takes the view that the disabled person, or the unemployed person forced out of the market (often through no fault of their own), should be given some support. That is done in the social realm, not by the market (although in many ways it supports the market), but because that social approach draws funding (through taxes) from market activities, groups like the IPA, and its business supporters, believe such funding should be severely limited — or non-existent in their perfect world! You can see where the Abbott government draws its inspiration from in its approach to welfare but, as it discovered post-budget, it is not a view widely held by Australians.

Murdoch also mentioned that there was a difference between being ‘pro-market’ and ‘pro-business’, a difference the IPA does not yet seem to have grasped. It has in its 75 ideas the development of northern Australia which, it states, the government should support by creating a special economic zone that provides government incentives and concessions. If the IPA actually believes in the free market then the north would be developed without government assistance because it would be in the self-interest of the free market players to do so. If it requires government assistance, then that is actually, in Murdoch’s words, a ‘pro-business’ stand requiring government interference in the market. Some have unkindly suggested that this approach is simply supporting Gina Rinehart’s vision of the north that includes lower taxes for her mining operations. As a fictional political character used to say many years ago: ‘You may well think that but I could not possibly comment’.

There are reports, however, that some major corporations did withdraw funding support for the IPA over its earlier stance on Aboriginal affairs and more recently over its support of climate change deniers. If those reports are true (and apparently they cannot each be confirmed), it would suggest that some big businesses have more sense, and more understanding of issues beyond the market, but which influence the market, than the current IPA.

The IPA philosophy runs counter to the Australian concept of ‘a fair go’, as Hockey discovered to his discomfort when he echoed Murdoch’s words. As suggested by my other pieces, the IPA misrepresents ‘freedom’ by supporting a very limited concept of the word. It also misrepresents its supposed free market philosophy by supporting specific business proposals that require government intervention (in contravention of the free market philosophy). It thinks that ‘the market’ is society. Its research is questionable, as is its political judgement, as evidenced by its approach to climate change.

The IPA may be behind Abbott’s throne but it is making its presence known, even boasting of its role, which may not be in its or Abbott’s best interests. It has arguments built on sand that are not in accord with the values of the majority of Australians. The more it comes out from behind the throne, as it is doing, the more Australians will understand what it, and the Abbott government, truly stand for.

What do you think?

Can the World be a Better Place?

‘Pay it forward’ is a concept where the beneficiary of a good deed repays the ‘debt’ by assisting others, who need some help and support into the future, rather than the initial benefactor. Wikipedia credits the terminology to a book written in 1916 by Lily Hardy Hammond entitled In the Garden of Delight.

On 10 October the Nobel Prize Committee announced the winners of the 2014 Nobel Peace Prize. They were Malala Yousafzai, a 17 year old Pakistani lady who promotes the rights of children to have an education and, as a result of her activism, was shot in the head two years ago by the Taliban while attending school in Pakistan’s Swat Valley, and Kailash Satyarthi, a 60 year old Indian gentleman who has campaigned for years against child slavery and child trafficking.

The Guardian reported that the two prize winners contacted each other soon after the announcement was made and decided to invite their respective prime ministers to the joint award ceremony in Oslo on 10 December 2014. There is a long history of dispute and mistrust between the two countries and it will be interesting to see if both prime ministers attend.

The Nobel Prize Committee stated in its press release:

The Nobel Committee regards it as an important point for a Hindu and a Muslim, an Indian and a Pakistani, to join in a common struggle for education and against extremism. Many other individuals and institutions in the international community have also contributed. It has been calculated that there are 168 million child labourers around the world today. In 2000 the figure was 78 million higher. The world has come closer to the goal of eliminating child labour.

Effectively what has happened here is that two people from different nations and religions have been awarded what is considered the ultimate prize for work to better the human race.

While some may argue that the Nobel Prize committees don’t always get it right, more often than not, they do. Usually the people or organisations that have been awarded a Nobel Prize have excelled in advancing the human condition in some way. In 2014, the committee acknowledged that the joint winners of the Nobel Peace Prize showed that different religions and different nationalities (India and Pakistan) can work together to achieve a common aim, despite the long history of distrust between those two countries at a national level. It is a powerful message.

Alfred Nobel made his fortune by invention. He successfully applied for 355 patents — including dynamite (which Alfred invented after his brother Emil was killed in an explosion). In 1888, another of his brothers, Ludvig, died and a French newspaper accidently published Alfred’s obituary, criticising the invention of dynamite. Nobel then rewrote his Will to:

… set aside a bulk of his estate to establish the Nobel Prizes to honour men and women for outstanding achievements in physics, chemistry, medicine and literature, and for working toward peace.

He died in 1895, and after his estate was settled, 31,255,000 kroner (around US$250 million in 2008 terms) was left for the establishment of prizes. Yousafzai and Satyarthi will share a cash award of around $1million from Nobel’s estate as well as the well deserved honour and glory.

Nobel hasn’t been the only person to ‘pay it forward’. Microsoft hasn’t had a reputation of being the most ethical of companies on the planet with a number of ‘anti-competitive behaviour’ judgments against it in various jurisdictions. The Bill & Melinda Gates Foundation is headed by Bill Gates, one of the founders of Microsoft. According to its website, the Foundation has US$40billion in assets, has made US$30.1 billion in grants since inception, of which US$3.4 billion was granted in 2012 and US$3.6 billion was granted in 2013.

The Foundation’s website claims:

Our foundation is teaming up with partners around the world to take on some tough challenges: extreme poverty and poor health in developing countries, and the failures of America’s education system. We focus on only a few issues because we think that’s the best way to have great impact, and we focus on these issues in particular because we think they are the biggest barriers that prevent people from making the most of their lives.

While the program is based in the USA, there have been a number of grants to universities, hospital research organisations and even website design companies in Australia to further the aims of the Foundation.

Unfortunately for every Alfred Nobel or Bill and Melinda Gates, there are others like the Koch brothers in the USA and Rupert Murdoch.

There are a number of groups both here and in the USA that claim to be ‘grass roots’ organisations that are concerned about the government’s influence in every day lives. In the USA:

There’s just one element missing from these snapshots of America’s ostensibly spontaneous and leaderless populist uprising: the sugar daddies who are bankrolling it, and have been doing so since well before the “death panel” warm-up acts of last summer. Three heavy hitters rule. You’ve heard of one of them, Rupert Murdoch. The other two, the brothers David and Charles Koch, are even richer, with a combined wealth exceeded only by that of Bill Gates and Warren Buffett among Americans. But even those carrying the Kochs’ banner may not know who these brothers are.

In August 2010, The New Yorker magazine published a long article demonstrating a link between Koch Industries and ‘grass roots’ organisations such as ‘Americans for Prosperity’. Koch Industries is a company owned by David and Charles Koch that manufactures Lycra and other ‘household brand names’ and has significant interests in the oil and energy industry. The article claims:

During the 2000 election campaign, Koch Industries spent some nine hundred thousand dollars to support the candidacies of George W. Bush and other Republicans. During the Bush years, Koch Industries and other fossil-fuel companies enjoyed remarkable prosperity. The 2005 energy bill, which Hillary Clinton dubbed the Dick Cheney Lobbyist Energy Bill, offered enormous subsidies and tax breaks for energy companies. The Kochs have cast themselves as deficit hawks, but, according to a study by Media Matters, their companies have benefitted from nearly a hundred million dollars in government contracts since 2000.

Remember the ‘Global Financial Crisis’ of 2008? Australia’s reaction was a series of measures to stimulate the economy — namely the $900 cheques to families, the home insulation scheme and the ‘Building the Education Revolution’ where infrastructure was provided at thousands of schools across the country. On a macroeconomic level, the program was successful as Australia is one of the few countries in the world that can truthfully claim continual economic growth for a period that exceeds 20 years. The New Yorker reports, however, that in America:

Soon after Obama assumed office [in 2008], Americans for Prosperity launched “Porkulus” rallies against Obama’s stimulus-spending measures. Then the Mercatus Center released a report claiming that stimulus funds had been directed disproportionately toward Democratic districts; eventually, the author was forced to correct the report, but not before Rush Limbaugh, citing the paper, had labelled Obama’s program “a slush fund,” and Fox News and other conservative outlets had echoed the sentiment. (Phil Kerpen, the vice-president for policy at Americans for Prosperity, is a contributor to the Fox News Web site. Another officer at Americans for Prosperity, Walter Williams, often guest-hosts for Limbaugh.)

The New York Times reported Jane Mayer’s article in The New Yorker and correctly pointed out that David Koch had donated millions of dollars to the arts, cultural facilities and medical research in the USA. It also mentions:

As Mayer details, Koch-supported lobbyists, foundations and political operatives are at the center of climate-science denial — a cause that forestalls threats to Koch Industries’ vast fossil fuel business. While Koch foundations donate to cancer hospitals like Memorial Sloan-Kettering in New York, Koch Industries has been lobbying to stop the Environmental Protection Agency from classifying another product important to its bottom line, formaldehyde, as a “known carcinogen” in humans (which it is).

There seems to be a divide here between progressive and conservative. While not praising the businesses of Alfred Nobel or Bill Gates, both of whom were rightly criticised at times for their business practices, there seems to have been some element of ‘paying it forward’ through the establishment of a financial environment to celebrate and improve the human condition. Others such as the Koch brothers seem to devise methods to promote their own business interests while attempting to remain unseen. Australian Senator Cori Bernardi is proud of his links to the US ‘Tea Party’ which receives considerable funding from the Kochs according to Jane Meyer. Bernardi was sacked from the ‘front bench’ during the time Malcolm Turnbull was opposition leader and resigned from a junior ministry in the Abbott government for the promotion of views that were too conservative even for the Liberal Party. Ironically, one of the people promoted as a result of Bernardi leaving the ministry was Arthur Sininidos who became assistant treasurer — then ‘stood aside’ when questions were asked about his business ethics.

The Abbott government’s denial of climate change, dismissal of the human rights of the unemployed and refugees, and the claim to be managing a ‘debt crisis’ are straight from the ‘playbook’ of the US conservatives as detailed by Jane Meyer in The New Yorker magazine.

Australia also has a history of people who have ‘made good’ ‘paying it forward’. Two examples are Graham Wood and Clive Berghofer who both actively support causes they believe in.

Wood co-founded Wotif, a last minute accommodation booking website in 2000. It now operates internationally and is based in Brisbane, Australia. In a 2006 interview, Wood described how he became wealthy — coming up with the original idea and realising he had nothing to lose. Wood has given significant funds to University of Queensland, the Australian Greens, assisted in the bankrolling of two news websites (The Global Mail and The Guardian Australia) and with Jan Cameron (the founder of the Kathmandu clothing firm) purchased a timber mill in Tasmania to effectively shut it down and preserve the old growth forest.

Clive Berghofer comes from Toowoomba in Queensland and made considerable money through property development. He was Mayor of Toowoomba for ten years and for some of that time also a National Party state member of parliament prior to the law being changed so that people could not serve on two levels of government concurrently. As evidence that conservative political leanings do not automatically disqualify people from attempting to improve the human condition, Berghofer’s website claims he has made numerous donations to medical research as well as sporting and educational bodies. Berghofer is on record as donating $60 million to the Queensland Institute of Medical Research as well as significant funds to Careflight.

As Nobel Prize winners, both Yousafzai and Satyarthi have earned the right and deserve to be known as ‘The Honourable’. Demonstrably, both of them will make good use of the fame and fortune that comes from being judged the world’s best peacemakers according to the Nobel Prize Committee for 2014. You could argue that the Gates family, Warren Buffett, Graham Wood and Clive Berghofer are also ‘paying it forward’ by supporting causes that will improve the human condition. It’s a shame that conservatives such as the Koch brothers and Bernardi seem only to seek improvement to their own condition.

What do you think?

Lords and ladies: a second morality tale

The Spruiker

Lords and Ladies, before we begin, may I humbly beg your indulgence to refresh your memory of the first morality tale, of the matches rustling in ragged coat pockets, of the fires and rising waters, of the tree monks and the paper castle.

Done? Excellent! Now we may proceed.

Lords and Ladies, since last I regaled you with tales of Tiny-er-er O’penmouth’s jesterly activities, he has been created a new man. Gone is the ‘er, er’ to be replaced by ‘pause, pause’, in his sentences and his thinking. Gone is the jester flapping inanely from great hall to field and forge. Now is come Tiny Napoleon O’penmouth, standing astride the history of kingdoms, soon to be master of all he surveys — even beyond what he can survey.

The Lords and Ladies of his kingdom succumbed to (or perhaps simply gave up on) his jests and gave him charge of their knights and yeomen: at least it saved them that irksome task — no longer checking that each breast plate was cleaned and shined or making peasants clear the roads of the droppings of the knights’ horses — and relieved them of the boredom of his jests. This new power has enthralled him, wrapped itself coquettishly in his mind, and he believes he is Napoleon — although, as Napoleon has not yet been born, perhaps he is the exemplar for the future. Now he thinks that distant Lords and Ladies should heed his every magnificent, even insignificant, word (even if it still takes him some time to get the word out), and should bow to his commands: although, like you, my Lords and Ladies, most continue to think of him as merely a court jester and not a good one at that. But beware!

The tale of Tiny Napoleon O’penmouth

When the Lords and Ladies of his kingdom granted Tiny Napoleon O’penmouth his newfound power, he immediately called out the knights and yeomen in defence of the borders of the kingdom. The Lords and Ladies looked on with benign amusement. There was no threat, they knew, but if it kept the jester amused and away from their own courts it achieved their intent and what harm could there be.

The knights and yeomen ringed the kingdom standing beside the orange boats — those which Tiny Napoleon O’penmouth had managed to retain, and he had also had the wheelwrights attach wheels to some of them. But who was he defending this kingdom from? No one was sure. But Tiny Napoleon O’penmouth decided that the borders must be protected from anyone trying to cross. ‘I’m not shutting the borders (pause) closing the borders’, he said, ‘just not (pause, pause) letting anyone in.’ Purely for the jest, he occasionally ordered the guards to allow some people to cross, then to round them up, pack them in the orange boats and push them back again or set them into the sea. He was having so much fun, he hoped the Lords and Ladies were taking notice of this splendid, ingenious jest.

They were and they didn’t like it. Tiny Napoleon O’penmouth was also stopping serfs whom the Lords and Ladies wanted to work in their castles and in their fields. Quite abashed he was summoned to the castle gates and four leviathan guards carried him, very un-genteelly, to the castle’s great hall where sat the Lords of the kingdom. (He had thought of arriving in one of his new orange boats with wheels but, luckily for him, they were all in use ferrying serfs and their families back across the border).

‘We need more serfs in our fields and at the forges, not fewer,’ the Lords told him.

Silence. And an open mouth. Tiny Napoleon O’penmouth could not think of a word to say, only numbers.

‘457’ he blurted.

The Lords silently glared at him.

‘400, 500, 700,’ Tiny Napoleon O’penmouth added into that silence.

All eyes were fixed on him and he could feel the chill of the dank castle dungeons creeping over him or perhaps the real hand of a guard grasping his shoulder in joyful anticipation of dragging another poor soul into the darkness below. ‘I can let in 700 (pause) or more. Or less,’ he added sensing no reaction. ‘We can call them (pause, pause) 457s.’ At least, he thought, that made sense of the numbers.

‘Call them what you will. Just let them in.’ The Lords’ final command.

Tiny Napoleon O’penmouth was dismissed. He had escaped the dungeons and felt well pleased with himself. Numbers had worked out fine instead of words. He would let some in — and send some back if the mood took him. After all, he now had that power. Power was a grand feeling, better even than being a jester. He could come to like this. The chagrin he felt, however, at the Lords’ final command prompted a vague impression that something was missing but in the pause between his thoughts he also missed the connection.

Not long afterwards, as fate would have it, a wagon load of serfs overturned in a distant kingdom — it was ten days ride away. Tiny Napoleon O’penmouth called the knights together.

‘I need you to ride to that far kingdom and bring the wagon home.’

‘Is it our wagon?” a knight dared question.

Tiny Napoleon O’penmouth hesitated. ‘It (pause, pause) it had our 457s in it’ Tiny told him. The knight gazed quizzically— what was a 457? — but asked nothing more. ‘And you’d better (pause) better bring the 457s here as well — at least, any who are (pause) still fit to work.’ The knights rode off not at all sure what they were meant to do but as valiant knights they did as they were bid.

A short time later, news came that the peasants in that distant kingdom were revolting. Tiny thought there was a joke about that but couldn’t quite bring it to mind.

Then, in a stroke of genius (at least Tiny Napoleon O’penmouth thought it was a stroke of genius), he decided that the wagon must have been overturned by the revolting peasants. (What was that joke?)

In his green great hall, with his jesters, clowns and goblins behind him and with a few summoned peasants in front, Tiny Napoleon O’penmouth unleashed page one of his exalted vision:

‘Those serfs in that far kingdom have forgotten their place. They think they can sup at the same table as the Lords and Ladies. They think they need no longer work for the Lords and Ladies. They are making the kingdom unsafe for the Lords and Ladies. They are interfering in other kingdoms and stirring serfs there to think as they do. They deserve the condemnation of all kingdoms. They deserve the condemnation of all other serfs for threatening your way of life.’

That wasn’t what the peasants thought at all. How could they work when fires ravaged the landscape, when waters rose and no longer receded? When the land turned to mud, they could barely grow enough food and the Lords and Ladies demanded what little there was. And in that kingdom, the peasants had finally taken the matches from their pockets and lighted the fire of revolution.

The knights returned from that far kingdom empty-handed: no wagon and no fit serfs to work for the Lords and Ladies but that no longer concerned Tiny Napoleon O’penmouth. He had discovered the rapture of his power, able to send the knights off to wherever he chose and, to his astonishment, many of the serfs even cheered them as they rode out and when they rode in again. This was all starting to add up in Tiny Napoleon O’penmouth’s mind, even if the additions were interrupted by pauses. He couldn’t quite see it yet but the numbers were fatefully drawing together. Perhaps it required just a shorter pause between his thoughts.

The peasants’ revolt spread. New kingdoms were being infected by it as the waters continued to rise, as the fires continued to burn. Tiny Napoleon O’penmouth sent twelve knights and their retinue to join knights from other kingdoms: the Lords and Ladies of many kingdoms were by then becoming alarmed and sending their own knights to quell those rebellions before more castles burned, before more fields were left untended, before revolt spread to their own kingdoms. ‘You are defending our own kingdom,’ Tiny told the knights before they rode off. ‘No we’re not,’ someone shouted from the attendant crowd, but Tiny didn’t see who and ignored it for then, although noting it for the future: he could not have people doubting his splendiferous schemes or there would indeed be local rebellion.

Matching a shorter pause in his thoughts, the numbers came together in a second wave of genius and Tiny Napoleon O’penmouth had his epiphany. Now he understood how he could control the serfs and peasants of his own kingdom, how to quiet the dissenting voices. The Lords and Ladies would be grateful beyond measure: but did that matter now? They had not given him control over the peasants but he knew then how he would have it.

He returned to his great hall and, with the jesters, clowns and goblins again gathered behind him and a select few peasants in front (again), announced his next transcendent vision.

‘The peasants are revolting. (He wished he could remember that joke.) You might think it is only in the far kingdoms (pause) where I have sent our knights. But they threaten us. They threaten you. They are not content (pause, pause) attacking only the Lords and Ladies. They will kill any peasant (pause) who does not agree with them and kill them most horribly. They wish to create (pause, pause) a world (pause) a world where they are in control and you will still be serfs (pause, pause) but serfs not as well cared for as the Lords and Ladies tend you.’

Despite a lone cry of ‘crap’, the majority was listening then. They were mostly attentive and motionless awaiting Tiny Napoleon O’penmouth’s next word. No laughter, no raucous bellowing back at him. They know I am no longer only a lowly jester, he thought. They are afraid and that is good. He continued (after a pause, of course):

‘Already there are those among us who support those revolting peasants. Those who will seek to kill you and burn your fields (pause).’

‘The fields are already burning’, a peasant called across the hall, but only the same single soul who had earlier yelled ‘crap’. Tiny felt confident, however, that now such voices would disappear beneath the maelstrom of fear he was fashioning, so he ploughed on, digging more deeply the furrows of foreboding.

‘They threaten your way of life. You will have to flee for your lives unless you allow the knights and yeomen to patrol within our own kingdom, to go into houses and drag out those who would harm you, to follow them to their secret meeting places, to watch their every movement — where they go, whom they visit.’

He grew assured that now the Lords and Ladies would let him close the borders. But that question, ‘did it matter?’, re-echoed in his thoughts.

Previously, as no more than a common jester, he had thought that sometimes ‘shit happens’ but then he confidently understood he could make it happen. Even if not a single peasant in his kingdom (it wasn’t actually ‘his’ — yet!) was threatening revolt, it was a mendacious and all-powerful justification to round up those terrible tree monks (or those who looked like tree monks) who insisted that something substantial was amiss when the rising waters did not recede, when the fires kept returning. Yes, he could well do without them making the peasants restless and giving them something else to fear.

Tiny Napoleon O’penmouth continued to disregard those rising waters and recurring fires. The knights and yeomen could not stop them, so what was the point of concerning himself.

Yes, now he had the plan. Eventually even the Lords and Ladies would not be immune. The knights and yeoman would enter the castle on pretext of searching out revolting peasants who had found their way in as blacksmiths, cordwainers, coopers and fletchers, and find the Lords and Ladies who protected them or who heeded the preaching of the tree monks (whether they did or not would no longer be of consequence). He could be rid of them too. He would no longer need his paper castle. He would have the real castle!

‘Soon I will be Emperor’, he dared tell himself. ‘No more Lords and Ladies — just me. My power is majestic and makes me a glorious and illustrious personage, worthier, nobler yet, than the Lords and Ladies. I will be Emperor!’

What do you think of Tiny Napoleon O’penmouth?

Darkening times

The Australian Parliament recently passed legislation giving ‘law enforcement’ agencies considerably greater powers that are claimed to be necessary to combat the ‘Islamic State’ terrorism threat. Prime Minister Abbott also addressed the United Nations General Assembly late in September on the threat to humanity posed by the rise of the group and pledged Australia’s assistance in a united effort to control the threat. Mark Kenny, reporting for Fairfax, reported Abbott’s speech, on how Australia would shoulder its proportion of the burden in these ‘darkening times’, as being ‘workman like’ and ‘pedestrian’. This could be considered to be high praise for the organisational and communication abilities of a prime minister who flew to London to talk to his UK counterpart on the phone, who mangled a set piece in a foreign language and invented a new name for a country while standing beside its prime minister.

John Birmingham, writing on The Brisbane Times website suggests the sudden and urgent need to pass legislation and deploy security forces is primarily ‘theatre’. Civil libertarian Bret Walker SC is reported in The Saturday Paper as suggesting:

Indeed, by accepting the suggestion that terrorists are something other than ordinary murderers, we have “bought their propaganda” and given them the “glamour of being extraordinary”

While not minimising the inhumanity that the ‘Islamic State’ is reported to be capable of, could this action be seen to be an attempt to wrap Australia in khaki to distract us from other ‘elephants in the room’ — such as climate change perhaps?

The US Government’s Environmental Protection Agency (EPA) has a webpage that lists answers to a number of frequently asked questions in relation to climate change. It does acknowledge that temperatures on earth vary over time but points out the current rise is faster and more pronounced that what has occurred naturally in the past. It also suggests that the consensus of expert opinion is that human activities are actively contributing to the problem. The response to the question on potential effects of the global average temperature rising by 2° Fahrenheit gives some graphic examples, for the USA, on the extent of change to civilisation as we know it.

Changing the average global temperature by even a degree or two can lead to serious consequences around the globe. For about every 2°F of warming, we can expect to see:

  • 5 ‒15% reductions in the yields of crops as currently grown
  • 3 ‒10% increases in the amount of rain falling during the heaviest precipitation events, which can increase flooding risks
  • 5 ‒10% decreases in stream flow in some river basins, including the Arkansas and the Rio Grande
  • 200% ‒ 400% increases in the area burned by wildfire in parts of the western United States
As these effects are predicated on an average rise in global temperature, it stands to reason that similar changes would be experienced worldwide.

The day before Abbott addressed the United Nations, he chose not to attend an international conference on climate change — also held in New York. Abbott did, however, find the time while in New York to dine with Rupert Murdoch.

The conference was ‘sponsored’ by the United Nations and the attendees included David Cameron (prime minister of the United Kingdom and the PM that Abbott flew to London to ring) and Barack Obama (president of the United States). To be fair, Foreign Minister Bishop did attend the conference and the leaders of China and India also chose to send an apology.

European Union commissioner for climate action, Connie Hegedaard, commented:

I do not know what the reasons would be behind it, but, of course, the world will interpret who is showing up and who will not be showing up.

So that's for your Prime Minister and your government to decide, what kind of profile they want in this.

One of the outcomes of the conference was there seems to be a consensus that the use of coal for various industrial processes has a limited future. The Australian Government and the International Energy Agency disagree, stating that growth will come from newly industrialised countries such as China and India. In fact:

the Pulitzer Prize-winning climate change news website Inside Climate News published a story about the "Canada-Australia axis of carbon". It suggested that not only were the two nations not willing to pull their weight, but that they were seeking to derail the binding agreement on emissions reductions at next year's talks in Paris that many view as the world's last best hope to prevent catastrophic climate change.

"Neither the prime ministers of Canada nor Australia will speak at the summit, and the subordinates they have sent will not be offering the kind of ‘bold’ new steps that UN Secretary-General Ban Ki-moon is seeking on the way to a treaty in Paris late next year," it reported.

China, the largest consumer of coal in the world has announced that it will use 50 million tonnes less coal annually in the near future. China also is increasing the use of wind power technology in the next few years, to twice the capacity of the entire European Union.

The name Rockefeller has been associated with wealth, power and influence for decades. The ‘founder’ of the dynasty made a lot of his money in pumping oil out of the ground, processing it and selling the products. The Rockefeller family still has significant financial clout, with billions invested in industry. On the eve of the UN’s climate change conference the head of the family trust announced that it would be selling its USD56 billion of fossil fuel assets and reinvesting it into ‘clean energy’. The Rockefeller Trust is a member of a group known as ‘Global Divest-Invest Coalition’. Other members include Stanford University who have announced its USD21 billion endowments will no longer be invested in coal assets.

The Australian Government commissioned a report this year into the renewable energy industry and its funding. In a classic example of not asking the question until you know the answer, the panel was led by Dick Warbuton who is reputably no friend of renewable energy. Abbott has also claimed in the past that renewables don’t work because there is no potential for 24 hours a day, seven days a week generation of electricity. A report in Crikey from early this year discusses Dick Warbuton’s contribution as well as Abbott’s claims. The Crikey article also discusses the switch within Germany and South Australia to using considerable quantities of renewable power, refuting the argument that renewable power cannot be used as ‘baseload’ (generating the consistent demand for power day or night) as well as the experience in Germany where coal fired power stations are being mothballed as uneconomic soon after commissioning.

Spain has a reputation for bad waiters, economic problems and bull fighting. It also has a number of power plants that use renewable energy. At least one of the plants near Seville can generate power from sunlight 24 hours a day as it stores some of the heat generated by the mirrors as molten salt — which is then returned to the system when the sun isn’t shining to generate steam and turn the power turbines. Another Spanish solar plant has been immortalised by James May (of Topgear fame) in this YouTube clip.

There are a number of large solar power generators located in the USA, some of which also store heat to allow generation when the sun isn’t shining. One of the largest, located at Ivanpah in California’s Mojave Desert covers 1600 hectares and will eliminate 13.5 million tonnes of carbon dioxide from the atmosphere over the estimated 30 year lifespan of the facility.

If, despite the large area of desert and abundant sunlight across Australia, there really are problems with generating baseload solar power in Australia, as claimed by Abbott and others with what seem to be vested interests in the status quo, there is also promising technology generating power from the waves on the seashore. The waves never stop. The big issue would be the engineering to ensure that the infrastructure is not sucked out to sea or washed up on the beach. This engineering problem has been looked at by a number of different researchers. One firm that is trying to commercialise its solution is Australian: Carnegie Wave Energy, based in Fremantle. It has demonstration energy production plants in operation in Perth, Western Australia, and in Ireland. An added bonus is that they can operate a desalination plant, that doesn’t contribute to greenhouse gas emissions, using parts of the same infrastructure. While the Federal Government has provided a grant for the proving of the concept, the funding was provided in May 2012 — and, in any event, the WA government provided a larger sum.

Worldometers is a free resource on the internet that has contributions from a number of experts that calculates various statistics including the volume of greenhouse gases emitted, the end of oil and the end of coal. As the numbers are constantly changing it is pointless listing their estimates here — however, the number is less than 40 years in the case of oil.

Abbott went to New York to address the United Nations General Assembly on a significant threat to our way of life. While the ‘Islamic State’ could conceivably be a threat to us, the end of fossil fuels and irreversible change to the environment is certainly a threat, caused by the continual pumping of carbon dioxide and other harmful chemicals into the air. Even if the Australian Government is correct that, as a nation, we are responsible for only 1.5% of the world’s total, Australia has the resources, technical capacity and ability to generate considerable quantities of power from either large solar plants or harnessing the energy of waves to again ‘lift above our weight’ and assist others. Currently we don’t — and our current leadership doesn’t seem to be inclined to acknowledge the problem.

Australia’s prime minister misrepresented an emissions trading scheme as a tax and didn’t have the courage to attend a climate change conference in New York the day prior to his address to the United Nations General Assembly (while finding the time to dine with Murdoch). His review of alternative energy solutions is led by a person who has a long history of denial of climate change. He has removed an emissions trading scheme that was showing positive benefits to both the environment and the economy, all the time claiming that issues such as renewable energy have too many insurmountable problems to be considered as permanent solutions to energy supply. Clearly he is wrong but the recent actions by Abbott and his ministers would suggest that only some of the real problems facing humanity are important. The worst possible result of addressing climate change is that fossil fuels last considerably longer — which isn’t a bad alternative anyway.

While no one here is attempting to justify the actions of a small group that seemingly wish to inflict their fundamentalist views on others, which is worse, the ones that address an environmental problem that will affect everyone by doing nothing or the ones that address centuries of political unrest using an incorrect interpretation of a religious text?

Twenty-four hour a day, seven day a week generation of power can be achieved by use of solar, wind or wave power as well as coal and gas. The entire east coast of Australia is on the same electricity grid. Clearly technical or logistical issues aren’t the issue — what is?

What do you think?

Whose responsibility?

Man is by nature a social animal; an individual who is unsocial naturally and not accidentally is either beneath our notice or more than human. Society is something that precedes the individual. Anyone who either cannot lead the common life or is so self-sufficient as not to need to, and therefore does not partake of society, is either a beast or a god.

That was said almost 2,500 years ago by Aristotle. Religion continued the emphasis on social responsibility over the following millennia. Christianity has the parable of the good Samaritan and the Golden Rule, from Jesus saying ‘So whatever you wish that others would do to you, do also to them, for this is the law and the prophets’ (that is the wording in the modern English Standard Bible). Islam also emphasises community and, in fact, the foundations of Islam were based on reforming society; it also emphasises public, or communal, worship; and it has a strong emphasis on the social responsibility to stop your ‘brothers’ from doing wrong.

In the Western tradition, that began changing in the 1700s with the philosophy of Hobbes and Locke placing more emphasis on the self-interested individual, although Locke, unlike Hobbes, still believed humans were social animals but drew a clear line between civil society and the state — society creates order and grants the state legitimacy, and the state provides impartial justice and the impartial protection of property. Locke is considered the father of ‘liberalism’.

While Hobbes argued that humans in a ‘state of nature’ were constantly at war and life was ‘nasty, brutish and short’, Locke saw that ‘state of nature’ as peaceful because individuals had a duty to respect the rights of others. This was a ‘natural’ moral duty.

More recent writers, like Hayek and particularly Ayn Rand, took individual self-interest further. Ayn Rand went so far as to suggest that the individual has no ‘natural’ duties to society, summarised as follows:

We only have one life and the good is to live it. Learn to pursue your own happiness by discovering the life-promoting values it requires. Think rationally and don’t bow to authority. Join with other people when you have real values in common and go your separate way when you don’t. Don’t try to be your brother’s keeper or to force him to be yours. Live independently.

To me, it seems that these more recent approaches have come to dominate our social and economic thinking, with greater emphasis on individual rights and less on the social ‘duty’ to respect the rights of others.

The modern neo-liberal economists certainly see little or no role for government. In their perfect world the individual is free to pursue their own ends in accord with the John Stuart Mill maxim that ‘The only freedom which deserves the name is that of pursuing our own good in our own way’. But they tend to ignore the proviso in Mill’s statement: ‘so long as we do not attempt to deprive others of theirs, or impede their efforts to attain it.’

In reality, Mill’s maxim balances individual and social responsibility by stating that an individual’s freedom cannot come at the expense of others’ freedom (Locke’s natural moral duty to respect the rights of others). When we start taking account of ‘others’ in exercising our freedom and making our personal decisions and choices, we are exercising social responsibility. But there are also social responsibilities that are, or should be, communal. In our modern societies those responsibilities are often taken by government in the interests of the community as a whole.

In rejecting a social element in economics, economists refer to the ‘tragedy of the commons’ to justify that individual ownership, that is private property, is superior to common, or social, ownership. Although the idea has a longer history, the phrase came from a paper by Garrett Hardin in 1968. It was suggested that, when people grazed their herds on a ‘common’, a self-interested individual could improve his situation by adding one animal to his herd. The individual would gain the benefit. But if each individual adds one animal, or two, the common is quickly degraded. While the individuals retain the benefit of having an extra animal, the ‘cost’ (the degradation) is shared, leaving them with a self-interested benefit — before the failure of the system. Following this argument, and its corollary that Adam Smith’s benevolent ‘invisible hand’ of individual self-interest does not work for the commons, economists suggest that private property and the individual’s responsibility for that property remedies the situation.

That approach is based, however, on a misunderstanding of how commons worked. They were not ‘open access’ as the theory implies. Throughout the world where people shared resources, there were usually social and cultural rules that controlled that sharing. In Iceland, for example, the common resource of the fisheries was traditionally controlled by kinship rules that allocated spaces on the beach that were necessary for launching fishing boats. In some communities in India, the allocation of the common resource of water for farming was determined by community meetings. People accepted these approaches as essential for the well-being of their communities, or, in other words, were accepting social responsibility.

Hardin put the ‘tragedy of the commons’ in the context of population pressure and I accept that population pressure is a factor but not necessarily in the way Hardin interprets it. It is sometimes population pressure that will force people to leave a community, and enter the market economy, because the social rules prevent them having full access to the ‘common’. It is often on their return (even merely for a visit), with new ideas of individual responsibility, self-interest, and private property, that the decline of social obligations for the maintenance of the common accelerate.

It was the breakdown of social responsibility, of local rules and obligations that changed the use of the commons, and that itself arose from the introduction and growth of the market with its emphasis on individual self-interest. That can be seen in recent history in developing countries. As some people abandon the local rules to participate in the market, the ‘cost’ (in economic terms) of maintaining social obligations rises and no longer provides the greatest benefit, hastening the break-down of social responsibility. Rules of reciprocity, which were common in many societies and reinforced social obligations, also came under pressure from the influence of the market and the concept of private property.

In our own society, the health system provides an example of the roles of individual and social responsibility. A healthy population is, among other things, in the economic interests of a community or society, providing a healthy labour force and reduced costs in caring for the sick — ‘cost’ in this context includes time spent caring for the ill, which may mean two people withdraw from the labour force, the carer and the cared for. While an individual’s choices can affect their health (smoking, over-eating, not exercising) and, therefore, there is a case for individual responsibility, there are many other environmental and genetic factors that contribute to disease over which the self-interested individual has no control. Social responsibility is taken on by government to the extent that it attempts to control those external factors by, for example, pollution controls, food and drug safety, disease surveillance, occupational health and safety and even urban planning that allows for healthy environments, including access to exercise amenities (parks, walking tracks and so on). The neo-liberals would not agree with some of these. They are more likely to stress that the value an individual puts on their health is reflected in the price they are willing to pay — hence the growth of private fee-paying gymnasiums, let alone private health care.

Stressing the rights of the individual over the health of the community can have serious implications. In the case of major illness, we generally accept that individuals, even neighbourhoods or whole communities, may need to be quarantined — as in the current Ebola outbreak in Africa, or an outbreak of bubonic plague in Sydney in 1900 when many blocks in and surrounding the current CBD were quarantined, then cleaned, and people moved into camps. This is a clear case of social responsibility over-riding individual rights but I’m not sure how the neo-liberals would deal with it philosophically. There is also a tension between individual and social responsibility even with minor illness. If I have a cold or influenza, should I exercise my right to earn a living and go to work, or should I stay at home and not spread the illness to others? If I spread my illness, am I impacting the right of others to earn their living? It can be argued that paid ‘sick days’ for employees is a socially responsible way of dealing with this.

You would think that providing health care would be a ‘public good’ to be provided by government as a social responsibility but that is not necessarily so when one reads the economic definition of a ‘public good’. The economists usually consider that the market has responsibility for the efficient allocation of resources and governments the responsibility for public goods — this is the economic separation of responsibilities.

Economists define ‘public goods’ negatively, in the sense that they are basically goods the market cannot provide at a profit — no concept at all that there may be a social responsibility or a social benefit in government providing certain goods and services irrespective of the market.

For an economist, a public good must be ‘non-excludable’ and ‘non-rivalrous’. The first means that it is not possible, or not cost efficient, to exclude people from benefitting by the provision of the good. Fireworks displays are a simple example: I could set up a fire works display and attempt to charge people to attend but people could easily watch from a short distance away (possibly even from their own nearby homes) unless I set up a large exclusion area, and that may not be feasible or may be too costly.

The second, ‘non rivalrous’, means that the consumption of the good by one person does not preclude it also being used by another. If I watch the fireworks that does not stop other people from watching, or my use of a park does not stop others from using it.

I have seen sewerage systems listed as ‘public goods’ but it would theoretically be possible to have a system where people could be excluded by disconnecting them, as can happen with electricity, but that could have wider health implications that could not be restricted to the individual concerned (the very reason sewers were first constructed). So there is a socially responsible health aspect, not ‘non-excludability’, in ensuring that all people remain connected to the sewerage system but that social responsibility is missing from the economists’ definition.

The market is not in interested in ‘public goods’, as defined above, because ‘non excludability’ creates the ‘free rider’ effect: that is someone can benefit without paying — the person watching the fireworks from their own window. The market places more emphasis on ‘non-excludable’ than ‘non rivalrous’, so suppliers in the market will happily create a price for non-rivalrous goods but won’t become involved in non-excludable goods: in this context, sporting events and cinemas can be considered non-rivalrous (many people can use the product at the same time) but they are excludable (one person or 80,000 can be allowed into a sporting event — it just depends on making a profit).

Despite that, the neo-liberal approach has seen more and more goods and services moved from the public to the private domain blurring the separation of economic responsibilities. That also moves decision-making rights regarding the good or service from one agent to another and involves, or should, a shift of the associated responsibility. So if former public services are now provided by the market, should the firms in the market also bear the social responsibility that goes with them? The neo-liberal economists claim that minimal social responsibilities should be borne by the market, using Adam Smith’s ‘invisible hand’ to justify that self-interest has social benefits.

Corporate social responsibility is a significant issue. It rose to prominence in the 1960s and ‘70s but had almost disappeared by the late 1990s. It is making a comeback but the predominant economic philosophy remains that the duty of a CEO and a board is to maximise returns to the owners of a firm (the shareholders). It is argued that ‘social responsibility’ conflicts with the ‘duty’ to maximise returns, and also cannot readily be measured so there is little point in insisting that it should be part of a firm’s obligations. There is, however, an alternative argument that being a ‘good corporate citizen’ is in the long term interest of a company and the value it is able to return to its shareholders. Unless a company is intent on maximising earnings and profit in the short term and then folding (as some obviously do), a company able to sustain its earnings into the future does require some acceptance of social responsibility and good corporate citizenship. It is when they realise that their ‘image’ is important for sales, that these issues may rise to the fore.

For current ‘commons’ like the Earth’s atmosphere and oceans, economists argue that a degree of ownership is required to stop degradation, such as trading systems for reducing CO2 emissions, or tradeable quotas for fishermen, not that the problem can or should be remedied by government regulation. But if government in a democracy is representing the ‘will of the people’, then it may have a social responsibility to maintain the ‘commons’ for the people irrespective of the market. The UN is close to that view in relation to CO2 and climate change — but not the current Australian government.

What have companies been doing for over two centuries but ‘free riding’ on the rest of us by pouring their waste into the commons of the atmosphere, oceans and rivers. It is because the market has robbed the people of their control of the commons that private agents can exploit it; and also because many firms, following the neo-liberal economic agenda, don’t accept they have a social responsibility, neither generally nor in relation to the commons.

The neo-liberals ignore that people do not always act in their own self-interest. Social relationships and cultural values (social inclusivity) can mould decisions — these also shape our social responsibility. We support our neighbours in times of trouble, during floods and fires; ordinary people will run into a burning building to save someone they don’t know; people stop at road accidents to help if they can; people will care for a lost child until a parent turns up; and so on and so on. Despite what the neo-liberals think, social responsibility still exists in the hearts of the people and we are still a social animal — as infants we learn to be human in a social context, through the ‘others’ that surround us.

We should be demanding greater social responsibility, not just the promotion of individual self-interest, from companies and from government. Will we ever get social responsibility from our current government? Of course not, as it is too easy to see on which side of the fence it falls in this debate.

What do you think?

What have the unions ever done for us?

Monty Python’s Life of Brian was recently shown on free to air TV. For those that haven’t seen it, the story revolves around Brian, who lives in Palestine during the Roman occupation and somehow is involved with a group of people that want to overthrow the Roman occupation. The movie ends with Brian and others on crosses singing ‘Always look on the bright side of life’. Some Christian churches protested when the movie came out that it was a parody of the life of Jesus. The line from the movie ‘He’s not the messiah, he’s just a very naughty boy’ probably didn’t help!

The point of ‘Life of Brian’ for our purposes, however, isn’t a determination of the wisdom of the parody argument: it is a well known scene in the movie where there is a meeting of those who are trying to overthrow the Roman occupation. In the scene, ‘Reg’ is decrying the Romans by asking what have the Romans ever done for us?

So with apologies to ‘Reg’ (and the Monty Pythons in general), how about we change the question slightly to ask, ‘What have the unions ever done for us?’ given the generally declining number of union members in Australia.

The New Yorker magazine recently published an article entitled ‘Dignity’ that describes the fight by people who work for McDonalds and other fast food restaurants to get a living wage of $15 an hour. There are stories of intimidation and loss of shifts affecting those who are mobilising (most fast food workers are apparently casual); and resistance from the franchise owners and the corporate headquarters of some fast food retailers to a movement to increase the minimum wage in the fast food and other low paid industries across America. Traditionally, these employees are immigrants and not members of a union. Union membership is actively discouraged by a number of the employers — although the article does give examples of other businesses in the fast food industry that do pay considerably more per hour, produce better food and still make a profit.

The Australian Bureau of Statistics tells us in a paper released on 14 June 2014 that:

The survey also shows that 17 per cent, or 1.7 million employees were trade union members in the main job, this being the lowest proportion in the history of the series. That proportion follows a general decline in trade union membership over several years.

It goes on to say:

Of employees without paid leave entitlements in their main job, 6 per cent were trade union members, compared to 22 per cent for employees with paid leave entitlements. Trade union membership was higher in the public sector, with 42 per cent of all employees being members, compared with 12 per cent in the private sector.

So there seems to be a correlation between union membership and paid leave. Wikipedia lists the annual leave entitlements in a number of countries around the world. It is interesting to contrast countries with a history of union membership versus individual bargaining — such as Australia (20 days per annum), the UK (28 days per annum – including ‘bank holidays’) and France (25 days per annum) versus the USA (0 days per annum). There isn’t a direct correlation between any of these example countries: the relevance being that in the USA, there is no legislated minimum — it is up to the employer and employee to agree to paid annual leave.

In Australia there are 10 National Employment Standards. They include the right of paid annual leave for permanent employees (including part time workers). The ACTU’s Australian Unions website will tell you that the Union movement negotiated paid annual leave for the printing industry in 1936 and other industries subsequent to then. Full-time employee annual leave entitlement has risen from two weeks to four weeks in the past 50 years.

Traditionally people retire from active work at some point and rely on savings or contributions from others to help them live. Most Australians who are employed have one or more ‘Super’ accounts that hopefully will provide a reasonable income in retirement. In Australia, employer contributions to superannuation accounts are mandated (although the Abbott government recently determined that the next employer increase should not be made). There is also the availability of a payment from the government for those who have retired provided they can demonstrate they meet certain age or financial requirements (the ‘old age’ pension).

In the USA, superannuation (known as ‘pensions’) is a part of the ‘benefits’ package but, as The New Yorker article linked above points out, a considerable number of the low paid fast food and similar industry staff are not in receipt of any benefits over and above their wage. The USA does provide ‘Social Security’ but the USA Social Security system pays a benefit on retirement based on your income. So someone who works 30 hours a week for $8.50 an hour may only get $500 per month — depending on age and age of retirement. Remember they don’t necessarily have ‘super’ or ‘pension plan’ to fall back on. In contrast a full Australian Age Pension (in this exercise we are assuming that the person has no real savings or assets) is entitled to $854.30 per fortnight plus health care card and other concessions.

Some would say there is a ‘glass ceiling’ for women in corporate Australia. That is a discussion for another time: the issue here, however, is that up until 1969, women were paid up to 25% less for doing the exact same work as men. While there is still a gender gap in the average wage of Australians, two people doing the same work for the same company in Australia should be getting the same pay, regardless of gender. The Australian system is not perfect but it is better than the USA where its Senate in September 2014 (yes — this year) voted down a bill to legislate gender equality in wages paid.

While ‘Life of Brian’ is not an accurate portrayal of life in Palestine around two thousand years ago, there is a list of worthwhile achievements (roads, sanitation, wine etc) that were delivered by the Romans when they invaded the country. The humour behind the skit is that, after a while, these things are taken for granted and the consensus of opinion is that everywhere is the same.

The comparisons made here are only a few of the benefits of living and working in Australia. Don’t forget that the ‘centre left’ ALP and the ‘right’ LNP went to the last federal election trying to out-do each other on Paid Parental Leave (a worthy idea but the execution seems to be lacking at present). The Australian Unions website claims some of the credit for the implementation of the clearly superior annual leave, social security and ‘equal pay for equal work’ benefits enjoyed by Australians over and above those in United States — the ‘land of freedom and opportunity’. The Australian Unions website also lists a number of other achievements that were driven by the union movement, such as sick leave, long service leave and health and safety monitoring.

Not everywhere is the same. Australia has had equal pay for equal work for close to 50 years — the USA still doesn’t. Australians retiring in the future will have some form of savings that bolster (or, if they are fortunate, replace) their mandated pension entitlement: Americans won’t unless their employer decides to do it. Australia has a living minimum wage in comparison to the USA.

The ‘Dignity’ article in The New Yorker magazine demonstrates that collectivisation is still a valid tool to gain real improvement to workers’ rights and wages and, while Australians are leaving unions, it seems their employers are retaining their membership of organisations that promote the rights of business over their employees (as they are entitled to do). The problem is when employees can only find casual work (which eliminates the right to pay while on holidays for a start), they have less ability to protest when stripped of their penalty rates for working ‘unusual’ hours, when workplace health and safety measures are deliberately ignored or when compensation payments for forced redundancies are limited or eliminated by regulation (and if the employee is under 30, they may, if the current Government’s wishes are implemented, then have to wait up to six months to be eligible for unemployment assistance).

The union movement has demonstrably been a part of creating the environment that Australians enjoy. The Howard government met its downfall when it tried to take away workers’ rights, that those in other countries still don’t have — and the union movement contributed significantly to that shift in the Australian public’s attitude. While the union movement is not perfect, neither are similar organisations that protect the interests of business (Kathy Jackson and Arthur Sinodinos are examples here — one from each ‘side’). The other way to look at it is this: if there was nothing for the political right and employers to fear from the unions, why are the same groups still trying to neuter the unions’ ability to campaign and protect the perceived interests of their members in 2014 while ‘unions of employers’ are encouraged?

What do you think?