… and suddenly it’s 2016


Welcome to 2016 from The Political Sword and we behind the keyboards hope that the forthcoming year is everything you wish for.

In what seems to be a tradition, we start 2016 with a different prime minister, promises of better government and the reality of more spin, marketing and political games. The tradition for our New Year article is for something looking at 2015 in review and what might happen in the new year. Usually it isn’t all that serious as most of us would rather be watching the cricket. Well, Buzzfeed did Australian politics 2015 in pictures (language warning but well worth a look); the first cricket test was over in three days and the second in four and the Brisbane International Tennis only goes for seven days.

The ‘festive season’ allows us all to take a break from the usual routine, and the other day I was reliving my daughter’s recent dance concert via the (optional for $57.50) DVD ‘available for purchase on the night’ or later on-line — not forgetting the the ‘high quality photos’ that are also available on-line! No this isn’t a sales pitch for an obscure DVD; but while I was telling my daughter that she looked beautiful and danced excellently (and my son was complaining he wanted to watch YouTube clips about The Good Dinosaur instead), there are comparisons between the thousands of dance-school concerts, amateur football competitions and so on that occur each year and the current state of Australian politics.

My teenage daughter, like thousands of others across the country, loves dance and participates in weekly lessons. I like thousands of other parents dutifully attended the annual dance concert in the weeks before Christmas, bought the DVD, and praised the young performers on the depth of sheer talent they displayed on stage. It really doesn’t matter that the under 6 dancers were stage struck and forgot their dance (in spite of the ‘on stage’ helper and the dance teacher in the aisle mirroring the moves); that half the under 10 dancers went left instead of right; or the young acrobatics performer slipped after doing a cartwheel on stage. At the end of the day, all the performers — some as young as 4 — realise that they are a part of something bigger than their individual effort and they have to perform certain actions in unity with the other dancers. We all see our dancers gain a love of their involvement in the arts, confidence that they can perform the routines that they practice for so long, and hopefully some insight into how their actions affect others.

At the same time young dancers are learning the dance steps and music, they are also learning about teamwork, strength, fitness and understanding the concept that the sum of a group effort is greater than the individual effort. For the concert to appear seamless, there are weeks of practice, volunteers that make costumes, those that organise the performers, the staff at the theatre, the parents and relatives of the performers who are willing participants in a number of dances (of varying quality) performed by unrelated people and encouraging our children on their journey through applause and encouragement. Everyone realises they have a part in the proceedings and, for the greater good, all the participants play their parts with enthusiasm and grace. It is the same for footballers, cricketers and in fact most members of society.

The dying days of 2015 saw an agreement in Paris that in theory will reduce the level of global warming into the future. Prime Minister Turnbull attended the meeting (his predecessor apparently wasn’t going to), and Australia was also represented by Environment Minister Hunt and Foreign Minister Bishop. In amongst the general celebration — after all something is better than nothing — the Turnbull government seems to have a problem. As Lenore Taylor from The Guardian was there and we weren’t, how about we defer to her ‘take’ on the agreement and what it means to Australia. In short, Australia should no longer ‘fudge it’ and claim that overshooting the Kyoto Agreement means we can count those ‘savings’ against this new target. You might remember one of Rudd’s first actions was to sign that agreement even with the howling of various groups around the country of ‘we’ll all be rooned!’. In addition, there is nothing in the agreement that allows countries to decrease their emissions savings — only increase them. Nicole Hasham, writing for Fairfax publications had a similar view.

While it is possible to move the demand for energy from fossil fuel to renewables in a short space of time, there has to be the political will to do it, as is the case in Uruguay. It would be fair to suggest that Australia — the only country to scrap an emissions trading scheme — doesn’t have that will. While there is a self-destroying battle going on between the luddites, sorry Abbottites, in the Coalition government and the seemingly somewhat more progressive Turnbull faction, those that are supposed to be governing for all Australians won’t be game enough to do anything except ‘fiddle while Rome burns’ to avoid reducing support for their own faction of the political party they represent.

Not that climate change is Turnbull’s only problem. As soon as Turnbull left the country to go to France, his predecessor was hitting the airwaves with ‘his mate’ Alan Jones and writing in The Australian (paywalled) in an exercise that is probably politely called protecting his legacy and ‘amping up’ the fear of terrorism. The Political Sword isn’t the first to suggest that Abbott is ‘doing a Rudd’, (and this article points out how well that worked) and dare I suggest we won’t be the last. According to The Guardian, Abbott is likely to offer himself for re-election in spite of an opinion poll funded by The Australia Institute where the electors in Abbott’s seat of Warringah are telling him to go.

In the words of those annoying commercials on the digital TV shopping channels — ‘but wait, there’s more’. Three of Turnbull’s hand-picked ministers, Mal Brough, Christopher Pyne and Wyatt Roy seem to have questions to answer regarding the alleged campaign to replace Peter Slipper as the Member for Fisher with Mal Brough. You may remember in the last week of parliament for 2015, Brough seemed to contradict a statement he made on Channel 9’s 60 Minutes program, offered an explanation for the apparent contradiction, and then when the contradiction was spelt out to him:
Brough returned to the house on Wednesday morning to apologise “if my statement yesterday unwittingly added to the confusion rather than clarifying the matter”.

Labor repeatedly asked Brough to justify his claim that he had “answered the question without clarifying precisely what part of the question I was responding to”. Dreyfus said it was obvious from the tapes that there was only one question Brough could have been answering
While Brough has now stood aside pending completion of the investigation by the AFP, Pyne and Roy are still there.

Turnbull has still more to deal with. Instead of the ‘free steak knives’ that used to be promised by firms such as Demtel, scorned ex-Minister Ian Macfarlane decided to take his bat and ball from the Liberal side of the coalition to the Nationals. While Macfarlane is a member of Queensland’s LNP and theoretically a member of both the Liberal and National caucus in Canberra, the action (which could be described as a ‘dummy spit’ because Turnbull removed him from the ministry) alters the numbers of parliamentarians in each of the coalition partners in Canberra — potentially causing a ministry to be passed from the Liberals to the Nationals and destabilising Turnbull’s government. The Queensland LNP subsequently blocked the move; so Macfarlane returned serve with:
He said he would not make an immediate decision about his future in the federal parliament. “I’ll be taking some time over Christmas and making an announcement in the new year,” he said.
I, like millions of other parents sit through dance concerts, sporting events and a multitude of other events that involve our kids, to teach them about co-operation, sharing, learning new skills, confidence and that sometimes they have to sacrifice the top billing for the greater good. While (in my opinion) my daughter’s dancing was excellent, she wasn’t always at the front and centre of the stage. There could be a lot of reasons for this but I certainly didn’t go to the dance teacher after the concert and suggest discrimination because my daughter didn’t get the position I thought she deserved. I also didn’t complain because I sat through the entire first act without sight of my daughter on stage — and to my knowledge no one else complained about the staging or sequencing either.

So what makes those in politics think differently? Sometimes the greater good means that we have to do what is morally right, not what is self-serving. Australia has just signed up to a commitment to actually reduce carbon emissions into the future. Unlike others in a similar position, Australia is planning to use the ’credits’ earned by exceeding previous targets to reduce the actual reductions that will be required by polluters in this country.

The conservative rump of the Liberal Party has decided that the removal of ‘their leader’ (and both sides of politics ‘have form’ in regard to removal of sitting prime ministers) was in error, so they are actively destabilising the government’s agenda. Surely the greater good if you are an LNP supporter is a Coalition government in Canberra, rather than handing government to the ‘other side’ because you don’t have the leader you want. The same strategy worked well for the ALP too!

Ian Macfarlane has been the recipient of a number of cabinet posts in his term in the federal parliament. When a new prime minister makes a decision to bring in some new (and younger) blood, Macfarlane effectively has two options. He could sit on the backbench with others in the same position, such as Phillip Ruddock, and act in the greater good as a mentor to those coming through the system — or he could ‘spit the dummy’. His choice is obvious.

Not that Australian politicians are anything special in looking after their own self interests. The US Republican Presidential hopefuls are demonstrating their maturity by name calling:
Bush, speaking at a town hall meeting in New Hampshire, railed against Trump’s habit of offending demographic groups ranging from Muslims to women. Then he said: “Just one other thing – I gotta get this off my chest – Donald Trump is a jerk.”

The crowd in Contoocook broke into laughter and applause.

On Friday, on Twitter, Trump called Bush “dumb as a rock”.
The end of 2015 also brought signs of some politicians being willing to have genuine conversations with their electors, leading to better decisions that will achieve the greater good. Hopefully others will learn to manage the need to promote their own self-interest to the elimination of everything else, and that their efforts match what we teach our kids through organised activity and movies such as The Good Dinosaur.

Welcome to 2016; buckle up; it could be a wild ride.

What do you think?
This thread will remain open until 17 January when a piece with many musical links will be posted for your holiday entertainment.


The year of morals and ethics


It is likely that 2015 will be remembered around the world as the year when morals and ethics overcame deception and greed. There are a number of examples that could be given with regard to investment funds, rorting allowances and living circumstances as well as just corporate greed. Let’s just confine ourselves to a few.

In August this year, Fairfax and the ABC reported on a joint investigation into the chronic underpayment of wages to employees of 7-Eleven franchisees. According to Fairfax, 7-Eleven has 620 stores in Australia, predominately on the east coast. The joint investigation discovered that there were significant differences between the payroll records and the actual working hours of a number of employees — mostly overseas students in this country on student visas (which have restrictive work conditions).

The results of the investigation were reported by Fairfax on 29 August and broadcast by ABC on its Four Corners program on 31 August 2015. By 2 September, there were moves to call the 7-Eleven franchisor to appear before a Senate committee.

While the owners and operators of 7-Eleven may not be appreciating the attention at the moment, it seems that Fairfax and the ABC have reported fairly and accurately on a systemic failing of a large company. The company concerned is not denying the allegations, rather it has set up an ‘independent panel’ to assess the claims of affected employees (who are paid through the franchisor’s office) and to work with the Fair Work Ombudsman in the prosecution of a Sydney franchisee. The chairman of 7-Eleven Australia for many years, Russ Withers, as well as the General Manager Operations, Natalie Dalbo, have subsequently stood down.

Michael Smith, former Director of the Australian Institute of Company Directors and iiNet, was installed as Chairman of 7-Eleven with a brief to fix the problem and repair the reputation of 7-Eleven. He was reported as commenting:
7-Eleven was the tip of the iceberg for wage exploitation of young and foreign workers in Australia, adding: "We have a problem in this country."
Similar staffing accusations have been made against Australia Post contractors and United Petroleum franchisees which adds some veracity to Smith’s claim.

Clearly there is an issue. Unfortunately, the issue of deception is not limited to Australia. Around the world there are various regulations surrounding the emissions that motor vehicles are permitted to pump into the air. Some Volkswagen vehicles in the United States were discovered to be emitting up to 40 times the volume of some chemicals than they should have been. You can read about how the deception was discovered here and how VW organised it here.

After a number of high ranking VW employees ‘falling on their swords’ over the last month or so, the new CEO of Passenger Cars, Dr Herbert Diess, claimed the company ‘did some things that were wrong’. Surely an understatement from a moral point of view.

In the case of both 7-Eleven and VW, while the morals may be questionable, the objective was clearly to cut corners and enable a larger return to those that have a financial interest in the company. As a result of the reaction to the publicity regarding wage underpayment, the 7-Eleven franchise system in Australia has been altered to give those that actually operate the stores more than the previously contracted 43% of the store’s profit, and VW will be working out how to retrofit something like 11 million cars around the world so that they perform and emit the quantity of chemicals, as originally specified in the glossy brochure, with oversight from various countries that do care about emissions levels. (It is a telling point that in Australia, the ACCC is the agency investigating VW, not for the excessive emissions but for a breach of advertising standards.) In either case, there was short term financial gain with, one suspects, a fair degree of long term financial pain ahead.

While we could claim money is a motive for large companies to attempt to deceive, when governments do the same thing you have to ask why.

Days after the 2013 election, then PM Abbott and then Immigration Minister Morrison announced ‘Operation Sovereign Borders’ where Abbott effectively said that he would implement his ‘no more boats’ slogan — whatever it takes. One of the early actions was to withdraw information from the public, claiming ‘operational security’. In their submission for the 2014‒15 federal budget, the Australian Churches Refugee Taskforce argued:
In 2013-14 Australia will spend almost two-thirds as much locking up in detention a few thousand people seeking asylum, as the entire UNHCR spend in the last financial year assisting tens of millions of refugees and asylum seekers worldwide. This is a grossly disproportionate amount of money and is unjustifiable waste in terms of both the financial and human costs; with men, women and children being held in inhumane conditions in detention camps offshore.
In addition:
The publicly known allocations to offshore processing alone for the Department of Immigration for 2013-14 thus far are in excess of $3.28 billion. This figure excludes other associated costs which have been earmarked as commercial in confidence and not released, costs for these operations borne by other departments or arms of government, and other significant incentives offered to those countries in order to gain agreement with these operations.
For reference:
Yet by comparison, in 2013 the United Nations High Commission for Refugees (UNHCR) announced that its annual budget (composed primarily of voluntary donations) had reached a ‘new annual high of US$5.3 billion’ at the end of June 2013. The UNHCR has staff of more than 7,600 people in over than 125 countries and helps tens of millions of people.
In the 2014 budget the Abbott/Turnbull government was attempting to introduce a $7 ‘co-payment’ for consulting with a medical practitioner in Australia and ensuring that those under 30 who were unfortunate enough to be unemployed would have to wait six months to receive help from the social security system. Those measures were justified as helping to ‘repair’ the ‘budget emergency’. The same people were spending $3.28 billion of your and my money on fulfilling an election policy that is inherently xenophobic and of little value to Australia.

In addition to the extravagant waste of money that could have been spent helping those in need or creating infrastructure (after all Abbott claimed he was to be the ‘infrastructure Prime Minister’), Australian military units breached Indonesian territorial waters on several occasions which created a gulf in the bi-lateral relations between Australia and Indonesia. Towing back boats is also probably illegal:
International maritime law prohibits Australia from interfering with boats that fly the flag of another country on the high seas for the purpose of preventing their entry into Australia. Prohibited interference on the high seas includes transferring passengers onto Australian vessels or “towing back” the vessel.
For those who managed to evade the ‘tow back to Indonesia’ option, the Australian government has another form of torture for the innocent refugee. These ‘lucky’ people are flown off to detention centres in Nauru or Manus Island — part of PNG — to fulfil the ‘promise’ that ‘boat people will never live in Australia’. The treatment of those sent to Nauru can be summed up by the story of a Somali woman, allegedly raped by security guards on the Island, flown to Australia for an abortion and returned to Nauru before the procedure, apparently just prior to legal proceedings occurring to prevent the woman being returned to Nauru. While the Government claimed the woman had changed her mind about undergoing the abortion (a claim disputed by her legal team), an academic writer has suggested that the actions of the Australian government are similar to the ‘extraordinary rendition’ process practised by the USA during the war against Saddam Hussain:
Extraordinary rendition depended on the CIA’s ability to exert de facto control over its allies while remaining at arm’s lengths from the dirty work they performed.

Australian refugee policy works in the same way.

“People who are in the regional processing centres are the responsibility of either the Nauruan government or the PNG government,’ Dutton told Emma Alberici on the ABC’s Lateline program earlier this month.

Of course, Nauru was formally administered by Australia until 1966, just as PNG was until 1975. Both nations are heavily dependent on Australian aid. When they were asked to host detention centres, the suggestion was, as Marlon Brando might put it, an offer they could not refuse.
Until February 2014, the Salvation Army had been providing recreational and mental health services to refugees on both Nauru and Manus Island in PNG. The contract with the government was cancelled late in 2013 by then Immigration Minister Morrison. Morrison danced around the reason for the cancellation as well as refusing to discuss who would take over the provision of humanitarian services:
“I wouldn't be making any comment on those matters at this stage, only to say that the contract arrangements for our offshore operations are in the process of being determined with a view to improving our operational effectiveness at all of those centres based on everything we've been gleaning for the past 13 weeks since we've been in office," he said.

When told the Salvation Army had confirmed the contract termination, Morrison refused to say whether another provider would be brought in to provide the services, saying: "I provided the answer I'm giving today."
Could it be that the reason for the cancellation was actually in the same news report?
In the past, Salvation Army workers have blown the whistle on harsh conditions at both Manus and Nauru.
Roll forward to October 2015 and nothing has changed. Fairfax reported:
Charities working in immigration detention centres were asked to pay multimillion-dollar bonds that could be forfeited if they spoke out against government policy, as the Coalition sought to maintain secrecy over border protection.

In what critics say is the latest evidence of the government's determination to control information about its immigration detention program, aid agencies including Save the Children and the Australian Red Cross were asked to offer "performance security" — in one case, of $2 million — during negotiations over contracts relating to work caring for asylum seekers and refugees.
Without trying for a Godwin, are the Governments that were led by Rudd, Gillard, Abbott and Turnbull so concerned about the uproar that evidence of the true conditions on Manus and Nauru would bring, they tried to deny culpability? It didn’t work in Nazi Germany, it didn’t work for 7-Eleven, it didn’t work for VW so why on earth does the Australian government believe it’s going to work for them?

There has been one Australian journalist permitted to visit Nauru in the past 18 months and he comes from The Australian, an outlet that is usually friendly to the Liberal/National Government. This Guardian article reports on the lack of journalists going to Nauru, the $8,000 non-refundable application fee is apparently a significant disincentive!

There is still a month or so left in 2015: wouldn’t it be nice if the (forced) re-discovery of morals and ethics in the corporate world extended to the Australian government? Both 7-Eleven and VW have admitted error and claim they are working to correct the failures of the past. While it may all be smoke and mirrors, there are certainly processes in place to watch the two companies’ new-found honesty and credibility. Various governments around the world are certainly watching VW’s rectification process as the Fair Work Commission is watching 7-Eleven.

If the Australian government came clean on ‘offshore processing’, our budget position would be close to $5 billion better off; the refugees held in what are reported to be sub-human conditions in Nauru and Manus Island would be allowed to come to Australia (along with others in refugee camps around the world) to prove their credentials, with the potential to be re-settled in a kind and humane manner; our culture would be enriched (as the various waves of immigration over the past 40,000 years have done); and the Australian government wouldn’t have to tie themselves in knots defending the indefensible. It’s logical, honest and needs to happen, so that next time we sing the national anthem, we actually mean the fifth and sixth lines of the second verse.
For those who've come across the seas
We've boundless plains to share
What do you think?
Oh what a tangled web we weave! When large corporations are held to ethical standards and own up to their breaches, why can’t we expect the same of governments? Have we become so cynical of politics, of election lies, of ‘core and non-core’ promises, that we no longer expect ethical behaviour of our politicians? If that is the case, we have indeed reached a sorry state in which politicians have woven their own web of deceit far removed from ethical standards.

Next week Ken presents a very different take on the reasons why government is obliged to provide welfare and services in ‘Entitlement makes up for lost production’.


You can't patent ethics



Recently you may have missed the news that Yvonne D’arcy won her case in the Australian High Court. D’arcy had been involved in legal action against Myriad Genetics, a US biotech firm that developed a test to determine if people have a predisposition towards breast cancer. This was ground breaking stuff — and showed that, at least sometimes, the human will overcome corporate goals.

To discuss why this result is so important, we need to go back to the early years of the 21st century — 2003 to be exact. A quick disclaimer is required here. My medical training is limited to occasionally being able to get a ‘band-aid’ to remain where I want it for a period of more than a couple of hours: so the explanation of why this court case and its implications are important isn’t full of medical English.

In 2003, scientists completed the mapping of the human genome: in essence humans could now read and manipulate the biological codes written in the 3 billion building blocks of who we are and how we exist — our genome (or DNA). The formal project took 13 years. Although DNA had been identified 50 years prior to the finalisation of the Genome Project, and some items of DNA were worked on prior to ‘the project’, it took a while to work out what the 3 billion building blocks actually did. While it took 50 years to gain the understanding, now that we have it, those with the knowledge can compare what is in your body to what is expected to be there and identify a treatment for you, rather than for the average person of your age, gender, weight and so on, which leads to less adverse side effects and the better use of resources.

U.S.News reported:
Genomic medicine may help determine a person's risk of developing several specific medical conditions, including:
Cancer
Cardiovascular disease
Neurodegenerative diseases
Diabetes
Obesity
Neuropsychiatric disorders

Researchers are actively investigating the genomic and genetic mechanisms behind — and developing predictive testing for — such diverse medical conditions as:
Infectious diseases, from HIV/AIDS to the common cold
Ovarian cancer
Cardiovascular disease
Diabetes
Metabolic abnormalities
Neuropsychiatric conditions, such as epilepsy
Adverse drug reactions
Environmental exposure to toxins
It is possible to ask your general practitioner to arrange for your DNA to be mapped to identify potential problems. Before you go rushing down to see your doctor, however, consider this: if you discover that you have a predisposition for a form of cancer, you would have to disclose that information to your partner, your family as well as potentially those that make a business decision to insure you. In addition, in a similar way to saying those that live in Southern Tasmania are less likely than Queenslanders to acquire skin cancer, while you may have a predisposition it doesn’t necessarily follow that you will acquire the particular cancer. In May 2013, actor Angelina Jolie decided to undergo a preventative double mastectomy due to family history of breast cancer, supported by testing that revealed she carried mutated BRCA1 and BRCA2 proteins — indicators of a predisposition towards acquiring breast cancer. She had no signs of breast cancer when she underwent the operation and while the probability is that she would have developed the condition, it’s not a certainty.

Those who have, or have seen those close to them, endure cancer treatment over the years would be aware that medical advances, such as better testing, have meant that treatments for cancer are more effective and less debilitating now than they were 10 or more years ago. While in the past, it was common for people to lose their hair and be incapacitated for days after treatment; it is a far less common occurrence today. To an extent, this is an outcome of personalised medicine; the science has identified the correct targeting and dosage of the medicine to reduce adverse side effects while still being effective.

Medical science could now go from ‘taking a punt’ on a standardised dose of medicine having a beneficial effect to creating medicine based on the person it is meant for. Personalised medicine is still in its infancy — there seems to be a lot of potential for further advances. As you would expect however, some of the testing and development for the processes to be used is expensive. And here is the point of this article.

Some companies will develop a process, be it for medicine, software or vehicle safety (as examples) and patent it. According to IP Australia (the Government body that registers patents in Australia), a patent is:
… a right that is granted for any device, substance, method or process that is new, inventive, and useful. A patent is legally enforceable and gives you (the owner), exclusive rights to commercially exploit the invention for the life of the patent.
Others may determine that the invention is so important to humanity or their reputation that they decide not to profit directly from the invention. You sometimes hear of ‘open source’ computer software — it is software that is developed by a group and freely available for use by anyone. The theory is that others will improve further on the developed software, to the benefit of all.

Some things cannot be patented: again according to IP Australia:
You cannot patent human beings or the biological process for their generation, artistic creations, mathematical models, plans, schemes or other purely mental processes.
The Human Genome Project has identified that a piece of protein known as BRCA1 and BRCA2 suppresses tumours in breasts and other organs by trying to fix damaged DNA or destroy what it can’t fix. A company in the USA called Myriad Technologies developed a test to determine the ‘health’ of the BRCA1 and BRCA2 protein and patented the mutated ‘indicator’ proteins that it identified during its research.

Myriad Technologies launched their product that would test for the mutated BRCA1 and BRCA2 protein in 1996. Myriad, a spin off from the University of Utah and others, had a business practice of ensuring exclusivity for its testing product to allow a return of the money that investors placed into the company. Myriad, which commenced operations in 1994, employed around 2,000 people, was publically traded and boasted revenue of USD723.1 million in 2015

After Myriad had sent a number of research bodies ‘cease and desist’ letters in regard to the identification of mutated BRCA1 and BRCA2 protein, the US Association of Pathologists as well as some researchers took Myriad to court over the patenting of ‘non-patentable material’. After a prolonged period and a number of court cases, the plaintiffs won the final avenue of appeal in the US court system, thus invalidating the patents.

Yvonne D’arcy — assisted by a well-known legal firm — was going through a similar struggle in Australia. After an appeal to the High Court, she won the case, which ensures that others can supply test kits for the proteins in question. A legal precedent has now been created, making it more certain that the court system will not entertain future claims of a similar nature.

Unfortunately it was not the first time that a company that commercialises medical research had relied on exclusivity to gain a return on their investment. In 2004, a subsidiary of the Mayo Clinic in the USA commenced offering testing for some auto-immune diseases where the drug dosage had to be managed to ensure benefit to the patient, rather than buying the ‘test kit’ from Prometheus, who licenced the technology embedded in the tests from a Montreal hospital. Prometheus sued the Mayo Clinic subsidiary in the California District Court and lost. The case was appealed through the US Court system leading to the patent being invalidated.

Medical research is expensive and has to be done correctly. That is why it is so expensive. When the product has an unintended side effect, the results can be deadly. Thalidomide was ‘invented’ in 1957 and was routinely given to pregnant mothers in the late 1950s and early 1960s to overcome the effects of ‘morning sickness’ across various countries, including Australia. Unfortunately, the drug caused a large number of birth defects and miscarriages. While the drug is still in use, regulators across the world introduced controls over the development and usage of drugs as a result of the shortcomings surrounding the inappropriate use of that drug early in its life.

So where to from here? We now have the technology to determine at a human protein level what is needed to sustain a healthy life — and the technology to individually treat people to rectify mutated or defective DNA on a personal level. Unfortunately the research and development of these options is not cheap. Our society operates on the basis that we are all entitled to receive reward for our labour — regardless of the type of labour. By the same token, the cost of research and some profit for the drug development company could preclude the availability of the drug for those without sufficient income.

Yvonne D’arcy and her legal team have made a stand that suggests that companies that go from nothing to over USD700 million in revenue in a period of about 20 years is not equitable or fair to those that cannot afford the testing that is potentially life saving. As a result, the testing for the ‘breast cancer’ DNA should be a lot cheaper due to competition. In contrast the medical development company would suggest to you that they need to make money ‘while the sun shines’ as the next project may cost tens of millions and then be a complete failure at the final hurdle before release.

While no one would want another Thalidomide tragedy, the cost to government of health care in Australia is increasing rapidly. There is a need for proper research, development and testing — all of which costs money. While former Treasurer Hockey’s claim that ‘The starting point is if our health and welfare and education systems stay exactly the same, Australia is going to run out of money to pay for them’, might be overblown, there has to be a point where the ethics of trying to provide a reasonable quality of life for people and the cost of doing so can balance.

If there were no legal way to protect the investment made in researching, developing and commercialising a test or drug that contains human proteins — and is therefore not able to be patented — would the test or drug come to market? There are other options to commercialise the product and retain some control but they would reduce profit margins. Would that be acceptable to the company shareholders? The dilemma is profit versus human condition. It’s a shame that (in Australia anyway) only ethics towards shareholders is legislated.

What do you think?
The world of medical research and new drugs and tests is a complex one. As 2353 explains, attempts to patent genetic material have been overturned in US and Australian courts but will that slow down essential research if companies cannot protect their ‘discoveries’? There are many conflicting issues involved that need to be guided by medical ethics but do profits or ethics come first?

Next week 2353 continues looking at ethics when he compares the ethical behaviour of some corporations and our government in ‘The year of morals and ethics’.

Won’t get fooled again

Last week, we published an article demonstrating that Prime Minister Turnbull really hasn’t changed all that much. While he has fiddled around the edges and has shown some ability in attempting to explain policy better, Australia is still treating refugees who attempt to come here abysmally; there is still an expenditure ‘problem’ rather than looking at expenditure and revenue (tax); there is no change from the expensive and unproven ‘direct action’ environmental package, same sex marriage or becoming a republic.

The Nationals have an important role to play in the current coalition government: they are the people that give Abbott or Turnbull the numbers to govern. The Liberal Party controls 75 seats in the House of Representatives — they need 76 for a majority. Apparently, each time the Liberal Party leadership changes the coalition agreement is re-negotiated. This time, the agreement (which hasn’t been made public) apparently documented a number of issues from the Abbott government that were to remain as Coalition policy.

Turnbull has history as one of the more progressive members of the Liberal Party. He was Opposition Leader when Prime Minister Rudd was working on an emissions trading system and supported the concept. The ultra-conservative faction of the Liberal Party was aghast, organised the numbers and replaced (by one vote) Turnbull with Abbott. With the signing of a new coalition agreement, plus a list of policies that won’t change, and possibly a separate letter regarding policy before they would re-sign the coalition agreement, it’s easy to suggest the Nationals, in their eyes at least, believe they ‘Won’t get fooled again’.


Turnbull has bigger problems than keeping the Nationals happy. While they ‘talk tough’, it is easy to argue that in the past the Nationals will compromise their principles for the smell of ministerial leather.

Turnbull’s first problem is Tony Abbott. At the time of writing, Abbott was indicating that he would stay on as a Member of Parliament. Abbott, while promising to get out of the way, has recently ‘subjected’ himself to interviews from some of his favourite media ‘players’ — Ray Hadley, Neil Mitchell and The Daily Telegraph. While some form of justifying his actions and protecting his heritage is natural, Mark Kenny, writing in Fairfax publications begs to differ:
His assertion that he could have done a David Cameron, and be re-elected despite a period of being down in the polls, is fanciful and speaks to the depths of his office's self-delusion.
The Political Sword has previously touched on the war between the conservative and moderate sections of the party, as played out inside the Coalition, News Corporation and in the wider community.
The political blame games have begun in earnest. Probably the first off the block was Abbott’s Chief of Staff Peta Credlin. A few days after the elevation of Malcolm Turnbull to the Prime Ministership, former Prime Minister Abbott’s Chief of Staff Peta Credlin gave a speech at a ‘Women of the Future’ event in Sydney.

Peter Costello, hardly a friend of Abbott’s appeared on Four Corners and claimed it was almost certainly the right decision to elevate Malcolm Turnbull.

Andrew Bolt made an appeal that Abbott really was a ‘decent bloke’ and that a number of his positives – such as his community service through Lifesaving – was ridiculed and thrown back at him. Ray Hadley raged against the 53 ‘dunderheads’ that voted against Abbott.

It seems that some within the organisation [News Corp] have decided that Abbott lost and have (perhaps reluctantly) thrown their support behind Turnbull as Prime Minister. Others haven’t.
While their ‘standard bearer’ is sitting there on the backbench, there will be mutterings regarding his ‘wasted’ skills in a similar way to those made by Rudd supporters after Gillard became prime minister. While Gillard initially made Rudd Foreign Minister, we know how well that worked. Rudd resigned as Foreign Minister (from overseas) and sat on the backbench for some time before his successful challenge. In addition, when conservative radio announcer Alan Jones lectured Turnbull he ‘had no hope of ever being the leader, you have got to get that into your head’, there is obviously some element of revenge that is yet to be extracted, as it seems that Jones is always right — just ask him. When you consider that Abbott era Minister Abetz has threatened to cross the floor if ‘necessary’, and both Abetz and Bernardi have openly discussed the formation of a ‘new’ conservative party in Australia, it’s probably fair to suggest (with a hat tip to Monty Python’s Dead Parrot sketch), that Abbott isn’t dead, he’s just resting. While it’s probably labouring the comparison a tad too much (sorry), Abbott sitting on the backbench ‘pining for the fjords’ of leadership claims he ‘refuses to snipe’ but will be in an ideal position to emulate Rudd and attempt to gather followers and take back the leadership/prime ministership.

Turnbull also has to manage expectations. The elevation of a new leader brings an opportunity for all to attempt to promote solutions for their own specific needs and wants. As an example, this article suggested at the start that Turnbull hasn’t made any immediate changes to refugee policy, environmental policy, same sex marriage or promotion of a debate around the republic.

The Western Australian and Queensland governments are confidently predicting funding for public transport. The overturning of the emasculation of the original National Broadband Network (NBN) is being promoted by others, while muzzling the overreactions of government organisations such as Border Force are being questioned as well. Again without much surprise, the New South Wales Teachers Federation is asking Turnbull to deliver on the (ALP’s) Gonski reforms to education.

For the record, TPS isn’t the only media outlet asking for change in Australia’s refugee policy. A group of coalition and independent politicians are asking Turnbull to heal the ‘weeping sore’ of Australia's treatment of asylum seekers on Manus Island and Nauru. Gillian Triggs, Australia’s Human Rights Commissioner is also asking for change In response to recent rape allegations made by refugees on Manus Island, Turnbull claims he is ‘concerned’ but the policies are working.
"The one thing we know is these policies, tough though they are, harsh though they are in many respects, actually do work, they save lives," he said.

"This is not a theoretical exercise anymore."

He criticised former Labor prime minister Kevin Rudd for dismantling the Howard era offshore processing regime, arguing the decision cost billions of dollars and an unknown number of lives.

Mr Turnbull said he personally argued against the Rudd government changes.
Turnbull, to his credit has sat down with representatives from business, community groups and organised labour on 1 October to discuss an economic way forward. While Turnbull was talking about reform and the reporting on the ‘mini-summit’ seemed positive:
The Turnbull government has reached in-principle agreement with unions, employers and welfare organisations to reduce a raft of concessional taxation arrangements that benefit the rich, as all sides hailed the prospect of a new era of consensus and co-operation in Canberra.
And:
In his first major interview since taking over as head of the Business Coalition for Tax Reform, Frank Drenth, whose lobby group includes the nation's biggest business groups including the Australian Bankers' Association, Australian Chamber of Commerce and Industry, Australian Industry Group, Business Council of Australia, Financial Services Council, Minerals Council of Australia and Property Council of Australia, said business was open to having a debate about the areas that were seen by the previous Liberal leadership as taboo.
Greg Jericho, writing for The Guardian questioned the reality of the debate over economic reform, suggesting that ‘reform’ just means ‘policy that I agree with’. So ‘having the debate’ over subjects that were ‘taboo’ according to the previous leadership is probably useless unless some action takes place. Jericho’s suggestion is:
You want to change Australia’s tax system, our IR system, our competition laws? Great, but tell us why and how that will improve our economy, and tell us who will be affected and how. If you need to say it will improve productivity, tell us how and explain what you mean by that word — because profit does not equal productivity.
Turnbull in his first month has created an atmosphere where business, government and the unions will talk to each other to make all our lives more equitable — which is better than Abbott could achieve in two years. That’s a brilliant outcome isn’t it? Well — no so fast.

On the same day as the economic ‘mini-summit’, where seemingly everything was on the table, Abbott made the decision to have a chat with 3AW’s Neil Mitchell. The chat was on air. So despite Turnbull trying to change the discussion, the day’s memorable headline was that Abbott hadn’t ‘forgiven’ Turnbull. By comparison, Gillard seems to have ‘moved on’ by limiting her comment on past political events and pursuing her interests on the larger stage that being a former leader of a country gives you. Sitting on a stage in New York City as an equal with Michelle Obama, Charlize Theron and others discussing how to improve educational outcomes for girls worldwide is a class act.

Turnbull obviously made a number of commitments to fellow conservative politicians to gain power. There also seems to be some disgruntled Liberal and National Party members along with some members of the media. Human nature would suggest that people seek a rallying point for their discontent. In politics now — as was the case in 2012 and 2013 — they have a former prime minister sitting on the backbench, to some extent twiddling his thumbs. It would seem to those that are not members of the inner circle (such as me) that it would be easier to seek to influence others to support the failed ‘hero’ rather than form a new political party. A challenge to Turnbull is almost inevitable unless he retains the Abbott policies — Abbott, Abetz and Bernardi have almost said so. If Turnbull does retain all the Abbott policies, there are a significant number of generalist and special interest groups that will vote for anyone but Turnbull.

Turnbull is a ‘failed’ opposition leader, now prime minister. A raft of groups from ultra-conservative to progressive have placed trust in Turnbull to further their particular interests. While some see Turnbull as the saviour, it is probably better to remember Turnbull was rolled the first time when he agreed with an environmental policy that subsequently demonstrated efficiency and proof of concept. We know now that he is surrounded by those who won’t allow him to change the world and get away with it. That should ensure we ‘won’t get fooled again’.

What do you think?
Turnbull may have won the Liberal Party leadership and the prime ministership but as 2353 points out his troubles aren’t over. Conflicting expectations have been created for both the conservatives and progressives. Whether Turnbull can meet those expectations is debatable. But, if we are aware of them then 2353’s words may be true and we ‘won’t get fooled again’.

Next week we go back a little in political time when Ken takes a closer look at the radicalisation awareness brochure released in September, in his ‘Are you sure you’re not a radical?’


Pass the Popcorn


It is now a month into the prime ministership of Malcolm Turnbull. Based on previous history, Turnbull is considered to be a ‘left wing’ Liberal, judging on his pronouncements over the years — being in favour of emissions reduction, same sex marriage, Fibre to the Home (FTTH) internet connections and other issues usually attributed to ‘the greenies’ and ‘latte drinkers’ from the ALP. When Turnbull outmanoeuvred Abbott, there was a delay in the necessary trip to the Governor-General to be sworn in as prime minister as the Nationals (the junior partner to the Coalition) wanted some additional conditions added to the agreement between the Liberals and the Nationals in order to retain the Coalition. Most of these conditions were to ensure the conservative policies espoused by the Abbott government were retained.

So far the major difference between Abbott and Turnbull seems to be actions like the release of a policy to inject $100million into programs to eliminate domestic violence and assist the victims. Announced by the newly minted Minister for Women, Michaelia Cash, and flanked by Turnbull and Rosie Batty (current Australian of the Year and domestic violence elimination advocate), Turnbull’s contribution was to correctly state that being disrespectful to women was ‘un-Australian’. It is doubtful the previous holder of both the prime ministerial and minister for women roles would have made the same statement. However to give the previous incumbent some credit, pulling a policy like this together probably started under his tenure.

The political blame games have begun in earnest. Probably the first off the block was Abbott’s chief of staff Peta Credlin. A few days after the elevation of Malcolm Turnbull to the prime ministership, she gave a speech at a ‘Women of the Future’ event in Sydney. In the speech, she argued that she was not responsible for the demise of Abbott, she did not control access or policy in the prime minister’s office and she refused to be defined by ‘insider gossip’. Credlin also claimed:
… she had been unfairly targeted by the media because of her gender and that there were different standards applied to women in powerful jobs. “If I was a guy I wouldn’t be bossy, I’d be strong,” she said. “If I was a guy I wouldn’t be a micromanager, I’d be across my brief, or across the detail.

“If I wasn’t strong, determined, controlling and got them into government from opposition, then I would be weak and not up to it and should have to go and could be replaced. So, it’s very binary when it comes to women.”
Katherine Murphy, writing in The Guardian disagrees, as does Barrie Cassidy from the ABC and Michelle Grattan who writes for The Conversation. Murphy, Gratten and Cassidy paint a picture of a controlling person who isolated her ‘boss’ from reality to such an extent that he didn’t see the writing on the wall. The obvious response to Murphy, Grattan and Cassidy is ‘well they would say that, wouldn’t they’ as each has written critical articles on Abbott and his government in the past. When Janet Albrechtsen writes a similar opinion piece in The Australian (paywalled), maybe there is some truth to the claims. (It is interesting that this type of writing is only done after the demise of the victim such as Rudd or Abbott — but that is a discussion for another day.)

Peter Costello, hardly a friend of Abbott’s, appeared on Four Corners and claimed it was almost certainly the right decision to elevate Malcolm Turnbull. Part of the justification was:
I think probably in the end it was the polls. That a majority of his colleagues felt that they were not going to win the next election and in those circumstances they decided to effect a change.
Clearly the conservative political media identities weren’t happy and they were prepared to let everyone know about it. On Channel 10’s The Project, Andrew Bolt made an appeal that Abbott really was a ‘decent bloke’ and that a number of his positives — such as his community service through Lifesaving — was ridiculed and thrown back at him. Ray Hadley raged against the 53 ‘dunderheads’ that voted against Abbott. Alan Jones wasn’t in a good mood either:
Judas, Judas, people not happy, the way it’s done, I mean the way it was done was beyond belief. The way it was done, unbelievable.
According to The Saturday Paper, the ascension of Malcolm Turnbull has fuelled a war within News Corp Australia. It seems that some within the organisation have decided that Abbott lost and have (perhaps reluctantly) thrown their support behind Turnbull as prime minister. Others haven’t. It must have been galling for some News staff that Turnbull started and finished the day after the demise of Abbott on ABC programs. On his radio program, Bolt declared that:
“We’ve actually won. Me and Alan,” he boasted. “We’ve house-trained Turnbull … we knocked him into shape, Alan and I.”

Then at tortuous length, he went on to enumerate all the ways in which Turnbull now was presenting as a convincing analogue of Tony Abbott, all because of the brilliance and courage of himself and Jones.

“Alan and I will bask in our success,” he concluded. “Behold our neo-Turnbull. Let the Left weep.”
Our good mate Cory Bernardi has a long history of opposing Malcolm Turnbull. It probably started when then opposition leader Turnbull sacked Bernardi from his front bench in 2009. In 2010 Bernardi was at the [US] Heartland Institute’s convention claiming that ‘Malcolm misled us’; in 2013, he was ‘advising’ Turnbull to accept the conservative position on same sex marriage; and as recently as early September complaining that, while his new NBN connection was fantastic, the organisation of NBNCo (part of Turnbull’s then communications minister responsibilities) was less than acceptable. He (along with Andrew Bolt) is openly talking about setting up a new party — one would assume for ‘true’ conservatives.

Apart from the problems involved in running the country, Turnbull seems to have a fundamental problem in policy and governance within his party. The Nationals have an agreement that some of the more contentious Abbott era policies will remain in place. The Bolts and Jones’ of the media seem to think that while they haven’t anointed the current prime minister, they have his measure. Meanwhile the Australian public seem to think that Turnbull will cure all the ills of the Abbott era. Effectively Turnbull can’t win. Turnbull needs the Nationals as he cannot govern in his own right — he needs 76 House of Representatives members to do so. He has 75 MP’s that identify themselves as Liberals. If he doesn’t keep the Abbott era policies he stands to lose the Nationals and the conservative media as well as the ‘right wing’ of the Liberal Party who may decide that the Bernardi party isn’t a bad place to be (with a further reduction in the number of Senators that Turnbull can rely on). If he doesn’t change policy from the Abbott era, while the Nationals and right wing will stick with him, he stands the risk of being seen as trying to sell the same agenda from a better postcode, in a nicer suit.

Either way, Turnbull’s initial bounce in the polls is not a precursor of success. While the ‘preferred PM’ statistic has changed significantly, the ‘two party preferred’ has only moved a few points, and recent history in Queensland and Victoria would suggest that 51-49 in your favour is not an election winning lead. While it all seems calm and serene on the surface, it is probably a reasonable assumption that just under the water, the business of working a way through the policy problem is being worked on night and day.

So Turnbull has to negotiate a Senate that he doesn’t control; a former chief of staff who is out for revenge — claiming the gender card as there is no other basis for the argument; potentially an ex-prime minister who will sit and stew on the backbench becoming a lightning rod for discontent in a similar way to Rudd and Keating; sections of the media that believe and publicly proclaim they have the sole prerogative to pick the prime minister of this country; members of his own party who are talking about leaving; a large section of the public who are expecting change for the better; along with an Opposition that is, according to the opinion polls, knocking on the door of majority popularity. All of these groups will have no problem in finding any number of statements Turnbull made in the past that directly contradict his political party’s current policy settings. While wise people change their mind when presented with additional information, Turnbull is already looking vulnerable on the continuation of the Abbott ‘Direct Action’ climate change policy.

The next few months are probably going to have more twists than the latest action movie. A comfy seat, dimmed lighting and popcorn seems to be appropriate.

What do you think?
Another former Liberal prime minister once said ‘life wasn’t meant to be easy’ and that may be true for the new prime minister. Can he ride the waves and survive the swirling currents around him or will he wipe out?

Next week Ken continues our look at new PM Turnbull in ‘Same old, same old’. And also watch out for pieces on this theme by Ad Astra on TPS Extra.


The silent majority


It’s not a secret that former Prime Minister Abbott is a ‘committed Christian’. Former Prime Minister Rudd also wore his Christianity on his sleeve — frequently shown on the Sunday night news answering questions outside a church in his electorate. Both are entitled to their beliefs, as are the 30% of Australians who consider their religion to be important in their lives.

None of us should really care if politicians choose to spend some time in a Christian church on a Sunday morning. We should be concerned, however, about the way religion is creeping into public life. Around half of Abbott’s federal cabinet was Catholic — and, as with other belief models, there are different ‘levels’ of belief. Abbott’s Defence Minister Kevin Andrews was much more (small ‘c’) conservative and could not support issues in which the Catholic Church’s formal teaching was overturned —such as same sex marriage. Newly minted Prime Minister Turnbull is a (small ‘l’) liberal Catholic who morally and ethically has no difficulty claiming to support issues such as same sex marriage while being a regular Catholic churchgoer. The Saturday Paper reported on a speech by the Liberal Party hopeful before the Canning by-election, who proudly claimed growing up in Victoria and accompanying his religious minister father on trips around the parish, as well as the work he and his wife do with their church group, as examples of why he would be a good member of parliament.

Former Prime Minister Menzies founded the Liberal Party in the 1940’s as a secular party in which people would have a forum to debate and discuss ideas — the best to be implemented in government — so why has that changed? The Saturday Paper discusses research from Paul Pickering (from the ANU) dating from 1998 where he compared the first speeches of the 1975 and 1996 cohorts in Australia’s parliament. (Both years were when the Coalition regained power from the ALP: in 1975 Fraser defeated Whitlam, and in 1996 Howard defeated Keating.)
“The rise of concern with the family appears to go hand in hand with an increase in religiosity in Australian politics,” wrote Pickering. “Where God received only one reference in the first speeches of the 1975 cohort … the first speeches of the ‘Class of 96’ contain numerous references to God and Christian principles.”

Pickering’s analysis highlighted something else, too, which he described as a “shrill chorus of anger”. He cited numerous examples of new members railing against “minority groups”, about “thought control and social engineering”, and about “political correctness”. And against government itself. Tony Smith, who replaced Bronwyn Bishop as speaker, warned against “the insidious rise and rise of the state”, which he likened to a “great praying mantis”.

There were no such expressions 20 years prior, Pickering noted. He characterised the class of ’96 as “the children of the ‘common sense’ revolution”.
Some of those who are overtly Christian frequently claim that, due to their faith, they have a higher understanding of morals and ethics than the 70% who claim to have no religion. Demonstrably, it’s a fallacy.

Josh Duggar was an Executive Director of Family Research Centre (FRC). His parents are Jim Bob and Michelle Duggar, parents of 19 children, who preach their belief in their god across the USA. He is married with four children.
Among the many initiatives he was involved in with the group were ones that firmly campaigned against equal rights for LGBT Americans, the legalization of same-sex marriages and a woman's right to choose.

In his role as Executive Director of FRC Action, he said in one interview that he was committed to 'taking the message of faith, family and freedom all across America.'

Josh also bragged that his family was the 'epitome of conservative values.' His opposition to gay marriage while at the FRC was based on his belief that it threatened family values.
Josh Duggar resigned his position with FRC after his name and details were found in a list of 37 million customers hacked from the Ashley Madison website — that promoted ‘cheating’ on customers’ partners.

If you have the time you could also search for information on the rise and fall of Jimmy Swaggart, as well as ponder the link between tithing and the growth of the property portfolio owned by Hillsong, which started 30 years ago in a church hall in Sydney and now spans the world.

People with religious beliefs are not all bad. The Political Sword has previously published an article on our TPS Extra site about the work of religious people who have genuinely dedicated their entire adult lives to helping others. Some religious people find other ways to promote their beliefs, such as the Anglican church in Gosford New South Wales. Rod Bower, the priest at the church, regularly changes the signboard outside the church and seems to have a rather good ability to make pithy comment on current events, comparing them to genuine Christian values. One of his recent signboards is pictured at the top of this article and quotes Abbott in the dying days of the Gillard government, a statement that came back to haunt him towards the end of his prime ministership. Apparently the CEO of Transfield was not happy with one of the recent signs — ‘HESTA divests Transfield. Good on ya’ —and asked to speak to the Bishop who supervises the Gosford Anglican Church:
Bishop Thompson said the Transfield chairwoman was "concerned to engage with the church in the light of Father Bower's messages".
He supported his priest, even if Transfield saw him as troublesome.
It seems that those with a strong religious belief have the same range of human behaviour as anyone else. Some live their values on a daily basis; others are found on websites that promote cheating on their partners. So why do some of the 30% with religious beliefs attempt to claim moral superiority and dictate terms to the 70% who don’t have a strong Christian religious connection? Are the silent majority ‘less worthy’ people because they don’t regularly darken the door of a Christian church?

Is it a fear of the unknown that makes traditional Christian values seem safe to a proportion of the 30%? Most Australians are of European descent and there is still a significant number of the Australian population who, at formative periods of their lives, were told that the Chinese, Japanese, Italian, Greek or Vietnamese nations were the enemy due to war or massive immigration at some point in our history. To an extent the people from the Middle East are being characterised in a similar way today as they have a different culture and religion from our European ‘norm’, as do the majority of refugee seekers. Psychologists have demonstrated that it doesn’t take much for a person to demonstrate xenophobic tendencies more or less ‘on demand’.
Researchers are discovering the extent to which xenophobia can be easily — even arbitrarily — turned on. In just hours, we can be conditioned to fear or discriminate against those who differ from ourselves by characteristics as superficial as eye color. Even ideas we believe are just common sense can have deep xenophobic underpinnings. Research conducted at Harvard reveals that even among people who claim to have no bias, the more strongly one supports the ethnic profiling of Arabs at [US] airport-security checkpoints, the more hidden prejudice one has against Muslims.

But other research shows that when it comes to whom we fear and how we react, we do have a choice. We can, it seems, choose not to give in to our xenophobic tendencies.
Self-professed ultra-conservative Liberal Senator Cory Bernardi has frequently commented on the dangers of Islam:
A frequent commentator on the ‘dangers’ of Islam, Bernardi has the Koran on his iPad but acknowledges he hasn’t read it, except for the passages he quotes to advance his arguments. He doesn’t know the ‘five pillars’, or basic tenets, of the Islamic faith. He claims his warnings about Islam are based on the “unique perspective” he gained while travelling in Europe where, he says, Muslim migration has led to “almost unprecedented levels of social unrest”.
He goes on:
“I keep saying this is not about Muslim people,” Bernardi insists. “A lot of Muslims eat pork, there’s a lot of Muslims who don’t pray five times a day or go to mosque, there’s a lot of Muslims who decide to drink alcohol. There’s a lot of Muslims who are terrific people, that are fantastic, like people of any faith.”
In other words: Muslims are fine, as long as they don’t practise their beliefs. In Bernardi’s maiden speech he —
extolled the importance of a strong economy, small business, the defence industry and entrepreneurship, and derided the “new culture of rights” in Australia. He thanked his mother for staying at home to raise him, hailed “the sanctity of human life” and marriage as “a sacred bond between a man and a woman”, and pledged: “I shall be guided by my conscience, my family, my country and my God.”
There is a large leap of faith (sorry about that) required to make any logical sense out of those quotes and how they can be the belief system for one person. Bernardi is guided by the sanctity of human life and is guided by his particular version of god. Yet he likes Muslims who effectively forgo the tenets of their particular religion to fit into Bernardi’s particular version of a ‘normal’ society. The terrifying thing is that Bernardi seems to have gained significant assistance from the American Tea Party.

To be fair, Bernardi isn’t the only one with this peculiar mindset. The Psychology Today article referred to earlier in this article reports on an experiment performed by an American researcher:
Psychologist Markus Kemmelmeier, at the University of Nevada at Reno, stuck stamped letters under the windshield wipers of parked cars in a suburb of Detroit. Half were addressed to a fictitious Christian organization, half to a made-up Muslim group. Of all the letters, half had little stickers of the American flag.

Would the addresses and stickers affect the rate at which the letters would be mailed? Kemmelmeier wondered. Without the flag stickers, both sets of letters were mailed at the same rate, about 75 percent of the time. With the stickers, however, the rates changed: Almost all the Christian letters were forwarded, but only half of the Muslim letters were mailed. "The flag is seen as a sacred object," Kemmelmeier says. "And it made people think about what it means to be a good American."

In short, the Muslims didn't make the cut.

Not mailing a letter seems like a small slight. Yet in the last century, there have been shocking examples of xenophobia in our own back yard. Perhaps the most famous in American history was the fear of the Japanese during World War II. This particular wave of hysteria lead to the rise of slurs and bigoted depictions in the media, and more alarmingly, the mass internment of 120,000 people of Japanese ancestry beginning in 1942. The internments have become a national embarrassment: Most of the Japanese held were American citizens, and there is little evidence that the imprisonments had any real strategic impact.

The targets of xenophobia — derived from the Greek word for stranger — are no longer the Japanese. Instead, they are Muslim immigrants. Or Mexicans. Or the Chinese. Or whichever group we have come to fear.
The Howard, Rudd and Abbott governments were past masters at the art of creating xenophobia, using terms such as ‘illegal immigrants’ and ‘boat people’ for refugee seekers who have every right to seek asylum in Australia. Sure, some of them don’t follow the same holy book as Howard, Rudd or Abbott claimed to do but neither do 70% of Australians who completed the last census. It is too early to determine if the Turnbull government is going to display any more genuine Christianity and humanity in relation to refugees, although there doesn’t seem to be any real impetus for meaningful change.

Unfortunately the actions of people such as Howard, Rudd or Abbott demean the community service performed by religious organisations such as the Anglican church in Gosford or the people we looked at some time ago in this article on TPS Extra. It’s also interesting that Catholic and Anglican Bishops are ‘pragmatic’ about the introduction of same sex marriage, yet the people paid to make these decisions are kicking the can down the road, one would assume to avoid upsetting a proportion of the 30% of the population that find religion important in their lives.

How do the religious political conservatives justify their belief that the majority of citizens in a country should be bound to their beliefs? It would be interesting to hear how Howard, Rudd, Abbott, Bernardi and so on can justify their actions with the teachings in their preferred holy book of ‘Do unto others as you wish them do to you’ (Luke 6:31).

What do you think?
Who is the real silent majority? — the committed Christians or the 70% (as 2353 points out) of Australians who are not regular church goers or have no religion. And are the 30% now trying to impose their views and values on the rest of us? Does it become a problem when such people are in our parliament, and leading our nation, and making decisions that influence the future of our nation?

Next week Ken will expose ‘The philosophical myth of neo-liberalism’.


Pluto and the conservative mindset


In 1930, Clyde W. Tombaugh found a ninth planet in our solar system and, after a time being known as ‘Planet X’, it gained the name Pluto. Contrary to popular belief, the planet wasn’t named after the Disney character or the nuclear element plutonium; rather the planet was named after the Roman God of the Underworld as suggested by an 11 year old girl from England who was given £5 as a reward for her effort.

By the early 2000s, advances in the design and accuracy of astronomical instruments demonstrated to scientists that Pluto didn’t qualify as a planet as it didn’t meet the criteria:

  • It needs to be in orbit around the Sun — yes, so maybe Pluto is a planet.
  • It needs to have enough gravity to pull itself into a spherical shape — Pluto…check.
  • It needs to have “cleared the neighbourhood” of its orbit — Uh oh. Here’s the rule breaker. According to this, Pluto is not a planet.
Where Pluto apparently fell down is that it is located in the middle of a belt of small planet-like objects — so it hasn’t ‘cleared the neighbourhood’ of other objects.

There was considerable coverage of the downgrading of Pluto when it occurred and New Mexico in the US actually legislated that when Pluto traverses the skies of the state of New Mexico, it is still a planet!

One of the scientists who made the declaration that Pluto didn’t make the cut as a planet was Neil deGrasse Tyson. As well as a host of scientific awards, Tyson won the (US) People Magazine’s ‘Sexiest Astrophysicist Alive’ award in 2000 and an Emmy nomination in 2014. Charlie Pickering recently interviewed Tyson on the ABC’s ‘The Weekly’ and discussed some of the notoriety he gained as a part of the panel of scientists that decided that Pluto was not a planet, but a dwarf planet. There apparently were two groups of people: those that accepted the decision realising that over the 70 years since Pluto was discovered advances in technology had made a re-evaluation of the planet status warranted; while the second group had a number of issues with the decision primarily due to the letter writers learning that there were nine planets in the solar system — ranging from Mercury to Pluto — and no one had the right to change the basis of that absolute truth.

So why is The Political Sword suddenly interested in a discussion from around 10 years ago on the status of a (dwarf) planet that is located on average 39.5 Astronomical Units (the distance from the sun to earth is one AU) from the sun? Basically — we’re not. We are interested in the discussion between Tyson and Pickering on the science behind it. While some could accept the change in status for the dwarf planet formally known as Pluto, others could send Tyson a letter 10 years later saying that they had now researched the matter for themselves, decided Tyson was correct and apologised for calling Tyson a ‘poo poo head’ some time in the noughties (the discussion starts at around 1 minutes 43 seconds into the YouTube clip linked above).

Tyson talked about the distinct difference in the way the brain works in people. Some are able to take on new facts as they are determined and others don’t seem to have that ability. For the purposes of this discussion, let’s call those that will take on board the research of others as progressives, and those that believe the facts are immutable as conservatives. The example of progressive and conservative thinking has been done to death in regard to the environment, so let’s look at the economy instead.

There is an argument that Australia, together with the rest of the developed world, is entering the post-industrial economy and experiencing the end of capitalism. The development of the post-industrial economy is linked to the supply and availability of information. Building consumer goods, digging fossil fuels out of the ground and other activities that have sustained the Australian economy for a century are becoming, and will be part, of the ‘mix’ in the future. Australia will, however, gain a greater proportion of its national income from activities that involve the ‘sale’ of our knowledge and skills.

For example, motor vehicle manufacturers have decided that it is no longer profitable to screw their products together in Australia. While this will cause considerable grief for those who have been employed (in some cases for decades) in manufacturing Holden Commodores or Ford Falcons, General Motors, Ford and Nissan will still have considerable workforces based in this country for the foreseeable future — despite the media reports. The difference is that the work performed has a greater technical and intellectual input, be it designing and testing vehicles for worldwide markets or casting items with a great deal of complexity for a number of global vehicle models.

You are reading another demonstration of the information age — The Political Sword. This blog, along with our other site TPS Extra, is put together by a small group of people that live somewhere between Brisbane and Melbourne using the internet, email and the very occasional phone call to co-ordinate the information and work flows that are necessary. This blog is accessible in most parts of the world, costs us very little to publish and you nothing to read. Prior to the internet, someone with very deep pockets would have had to fund the printing and distribution of this article — and even then it would have not been accessible around the world at the same time. Prior to printing, records were usually kept by monks who spent their entire lives recording history. Today, information is all around us and the storage of it is cheap.

So how is the current government handling this structural change in the Australian society and economy? Rather than accepting that coal is a fossil fuel that some suggest may soon be a ‘stranded asset’, the government is attempting to change the law so that a large coal mine can be developed in Central Queensland. When the newly blackshirted “Border Security’ promise to check people’s visas on the streets of Melbourne was cancelled due to community protest, ‘our’ Prime Minister claimed they ‘should not be demeaned’.

The current government promised to stop the boats. When it was determined by others, based on information retrieved from elsewhere in South East Asia, that the boats hadn’t really stopped as claimed, our government responded that it doesn’t comment on ‘on water’ matters and tightened independent access to the charmingly named ‘Offshore Processing Centres’ (where processing refugees for settlement in Australian seems to be the last item on the agenda).

Australia over the years has entered into a number of trade agreements that in theory allow better access to markets and lesser trade barriers. Australia along with a number of other countries around the Pacific Rim have been negotiating a trade agreement for the past couple of years. If you are an Australian, you have no formal way to access the proposed agreement, which may contain clauses that override our national interests for corporate interests. If you are a stakeholder and live in countries including the USA, you do.

The ALP started a process when in power of creating a world class telecommunications system across Australia that would allow all Australians to access information on the internet much faster than most can today using digital cable to each household and known as the National Broadband Network (NBN). One of the current Government’s claims before the election was that the system that was under development was more than needed. (Stop fast Internet anyone?) While the rollout of digital cable continues at a snail’s pace, a recent Senate enquiry has determined:
The Australian people are being kept in the dark by the minister and NBN Co on the cost and rollout timeframe of the NBN.
It has been demonstrated in the past that in any period of uncertainty, those that take the lead do better. Mark Zuckerberg has made billions in the past decade or so by providing a system (Facebook) for people to freely and easily converse with their friends and soak up information — even if the information are the problems that can only be experienced in a first world economy, such as photos of last night’s dinner. Others with a large volume of resources such as Google have tried to manufacture rivals, with limited success.

So how does our government attempt to keep pace with the change to society that we are currently experiencing? In short, they are trying to keep the genie in the bottle. This is where the discussion between Charlie Pickering and Neil Tyson at the top of this article kicks in. You may recall they discussed how some people could accept new facts and assimilate them while others couldn’t. The Abbott government seems to be of the latter mindset. Above are a couple of examples of reactions to events that in the stated views of Abbott or his ministers are inimical to Australian society. There are plenty more, such as same sex marriage, education standards, tax reform and so on.

Conservative leaders in Australian politics were not always so intent on keeping the status quo. It seems that conservative leaders from Menzies to Bjelke Petersen could analyse new information and make decisions based on the material at hand. While the ALP started the Snowy Mountains Scheme, construction continued through the 23 years of Liberal rule from 1949 to 1972. While some changes were made, the NSW Liberal premiers continued the construction of the Sydney Opera House and surprisingly Bjelke Petersen’s National Party introduced and funded rail electrification at 25Kv to the Queensland rail system. At the time 25Kv electrification was new and is better technology than the 1500v systems in New South Wales and Victoria.

Abbott is a Rhodes scholar. Despite how and why he achieved the honour, he got there. There are two possible options for his reluctance to meet and adapt to the societal norms of the 21st century: either he believes that the ‘large C’ conservative values will win him power at the next election or he genuinely is one of the people that Tyson claims can only understand the rote learning he experienced decades ago.

The last 100 plus opinion polls would suggest that his performance does not meet the expectations of the Australian community. It could be argued that opinion polls are just opinion — but those that conduct the polls have businesses to run and frequent large discrepancies from reality would quickly end the pollsters’ business operations. So it could be said that you would have to be living on another planet to bet on (large C) conservatism as a winning strategy as Abbott seems to be doing.

The other option is therefore more likely. Abbott came from nowhere to cause a hung parliament in 2010 and win the 2013 election. In the opinion of those who are of the same mindset — winners are grinners — and there is a certain amount of blindness that comes from belonging to a winning team. Abbott’s mind cannot grasp the new information in relation to burning fossil fuels; cannot fathom how the society he lives in has moved on from the ‘meat and three veges’ on the table every night for the family comprised of ‘mum, dad and the two kids’; and is kicking the can on contentious issues, such as climate change, the republic, tax reform and same sex marriage, down the road for the next parliament to deal with. Should Abbott get back in, the can will be kicked further.

While Abbott’s mindset is not unique, it is taking the ‘first mover’ advantage away from all of us especially in relation to adjusting to the new knowledge and information economy of the 21st century. That will be an ongoing problem for all of us.

What do you think?
Like those who rejected the downgrading of Pluto as a planet, 2353 shows that Abbott and his ilk refuse to accept new information. Abbott is avoiding contentious issues like marriage equality, despite opinion polls, and will continue to do so. He is avoiding economic changes, pretending that we can continue forever to just dig and sell our minerals. As 2353 concludes, that approach is not in the best interests for the future of Australia.

Come back next week when Ken will discuss ‘Another failure in Aboriginal and Torres Strait Islander affairs’.


The challenge of renewables


Later this year a conference will be held in Paris that will determine the global response to climate change. While the international jockeying has commenced, it seems there is a ‘tipping point’ that, if exceeded, will ensure that the world will never be the same again. Australia’s contribution is being keenly watched.

Australia was one of the first to introduce an Emissions Trading Scheme (misnamed by both sides of politics as ‘the carbon tax’) and certainly the first to almost ditch it. The ALP at its recent conference has committed to generating 50% of Australia’s electricity using renewables by 2030. It seems the current government has yet to make up its mind. Given that the world’s environment is warming and 2014 was the warmest year on record, doing nothing is not an option — and if the worst result is that fossil fuels last longer, is that a bad thing?

The ALP’s commitment to 50% renewables made some people happy but others were claiming the costs could be excessive. Abbott went as far as claiming that the ALP policy would cost $60 billion — pity the claim was based on a calculation ‘on the back of an envelope’.

The reality is that, according to the International Monetary Fund, Australia will subsidise coal, petroleum and gas consumption to the value of $41 billion during 2015.
Australia's current electricity mix can supply power at about $30 to $40 per megawatt-hour, according to estimates provided by the Grattan Institute.

If we were to build new fossil fuel power plants today they would produce power at about $50 to $75 per megawatt-hour based on the same Grattan model. New wind power would cost about $80 to $90 per megawatt-hour, while large-scale solar would be about $180 (Estimates by other groups put the cost of new coal power at higher rates.)
As the article points out, this is just the cost of generation — not the cost of the environmental mitigation required from burning fossil fuel.

Not everyone agrees on the costs. Alan Jones claimed on Q&A during July that:
“Eighty per cent of Australian energy comes from coal, coal-fired power, and it’s about $79 a kilowatt hour,” he said. “Wind power is about $1502 a kilowatt hour.”
He was spectacularly wrong (and to his credit he did apologise for the error), but there seems to be a trend here of plucking numbers out of thin air and constructing an argument to ‘demonstrate’ the economic madness of renewable energy.

While the IMF has new coal-fired power stations at a slight cost advantage (before the ‘on-costs’) over renewable power, Bloomberg has a different view:
By Bloomberg New Energy Finance’s most recent calculations a new wind farm in Australia would cost $74 a megawatt hour.

“A new large-scale photovoltaic project would cost $105,” says the firm’s Australian head, Kobad Bhavnagri. “A new coal-fired power station would cost $119. And a new gas base-load station would cost $92. So both wind and solar are already cheaper than coal.”

What’s more, says Bhavnagri, the cost advantage of non-polluting energy is rapidly increasing. “Wind is already the cheapest, and solar PV [photovoltaic panels] will be cheaper than gas in around two years, in 2017. We project that wind will continue to decline in cost, though at a more modest rate than solar. Solar will become the dominant source in the longer term.”
The Saturday Paper reports that Bloomberg has determined global spending on the construction of renewable generation capacity since 2013 has been higher than coal, gas and oil combined. The trend is likely to escalate. On top of that, electricity demand across Australia is reducing. Stanwell Power in Queensland closed down two generation units at its Tarong Power Station — citing lack of demand in 2012. Renew Economy reported:
The closure of the two units at Tarong follows the closure of the ageing 600MW Munmorah power station in NSW, Stanwell’s 125MW Swanbank B power station in Queensland, and the 240MW Playford B and the 520MW Northern brown coal generators in South Australia. Energy Brix has also reduced output. Northern recently reopened and will operate in the immediate future only in summer, when demand is higher.
Climate Works Australia, a partnership between the Myer Foundation and Monash University, has prepared a report, housed on the United Nations Sustainable Development Solutions Network, that discusses the probability that Australia could effectively be ‘carbon neutral’ by 2050 while maintaining current economic growth. Denmark is targeting to be completely free of fossil fuel by 2050. They are well on the way, having around 40% renewable energy on their electricity grid now. The New York Times reports that there are a number of practical problems in the transition to a completely fossil-free future, from winter nights with little wind through to ‘range anxiety’ for electrically driven vehicles.

The Danes are now subsidising fossil and nuclear power stations to remain on-line to cover eventualities such as still nights, as the cost of fossil or nuclear electricity production exceeds the price the generators can sell electricity for. Believe it or not, some Australian states are having the same issue. In Australia, electricity is traded on a ‘market’ across Queensland, New South Wales, Victoria and South Australia. Queensland and South Australia have excess generating capacity so they can sell surplus electricity into the market, which acts, as economists will tell you, ‘rationally’ (the price paid for surplus electricity is governed by the demand for the product). Electricity generators make decisions on how much electricity they will produce based on the expected return from the market meeting or exceeding the cost of generation. If the generators miscalculate the demand, the price paid for electricity increases rapidly, causing generators to increase production. If there is a surplus of electricity available, the price goes down. Those that can change production quantities quickly make more money than those that can’t. On occasions during the middle of the day in July 2015, the wholesale price for electricity in Queensland was a negative value rather than the ‘normal’ $40 to $50 per megawatt hour. While not the sole cause (the infrastructure allowing Queensland to ‘export’ power to Southern States was not working at full capacity):
The influx of rooftop solar has turned this model on its head. There is 1,100MW of it on more than 350,000 buildings in Queensland alone (3,400MW on 1.2m buildings across the country). It is producing electricity just at the time that coal generators used to make hay (while the sun shines).
If Queensland has excess power during the time that is usually profitable for power generators, and South Australia has the capability of operating entirely from renewable energy, as occurred late in 2014, the world is changing without waiting for the government to change.

Ergon Energy in regional Queensland (which is owned by the Queensland government) is conducting a trial of battery storage for the power generated from solar panels in a domestic environment which, if successful, will allow the use of domestic solar panel generated power at night or if it’s raining heavily. The Queensland government is also planning to install a number of renewable energy powered electric vehicle chargers along the Bruce Highway, which runs from Brisbane to Cairns.

Clearly the world is changing. It is conceivable that in the not too distant future we will be able to power our houses using electricity generated on the roof and stored in batteries under the house. Our cars will be plugged into a charging point each night and when we do want to travel further than the battery capacity, there will be a recharging station en-route (in a similar way to filling the car at the petrol station). Both of these fundamental changes will reduce our need for fossil fuels as well as infrastructure such as power lines. These fundamental changes will also reduce the business plans of a number of companies to historical artefacts. These companies are in a similar position to the tobacco companies were some years ago when the evidence that smoking is hazardous to health was overwhelming but before cigarette packet warnings and education programs were introduced.

The problem for energy companies is that if they don’t adapt, they will gradually fade away. However, there is an economic problem here — who will be the first to try and adapt to a new business model that addresses the rise of renewable energy, potentially giving their competition a ‘free kick’? The first to withdraw from the traditional generate, distribute and retail business model will leave a hole in the market that others will attempt to fill, so unless the strategy is planned and executed correctly, the early adopter could fail completely. While Ergon is conducting a trial of battery storage, they are a government owned business with a legislated supply area and no competition — so they effectively have a monopoly. The business and economic risks of the trial are significantly less in Ergon’s case than they would be in the case of Origin or AGL.

This doesn’t explain the Abbott government’s reluctance to support renewable energy. The Abbott government has reduced the RET (Renewable Energy Target), instructed the CEFC (Clean Energy Finance Corporation) to remove funding from ‘established’ renewable technology — which was profitable to the agency and the government — and launched various hysterical campaigns on wind farms, emissions trading schemes and aspirational targets for the move to renewable energy by the country over the next 15 years.

It is even harder to understand Abbott’s responses when it is considered that Pope Francis (the spiritual leader of all Catholics — including Abbott) has released an encyclical that not only acknowledges climate change caused by humans burning fossil fuels, but demanded immediate action to stop the world becoming ‘an immense pile of filth’:
In the encyclical, titled Laudato Si (Praise Be), On the Care of Our Common Home, Francis advocated a change of lifestyle in rich countries steeped in a "throwaway" consumer culture and an end to an "obstructionist attitudes" that sometimes put profit before the common good.
Not that Abbott is alone in ignoring the Pope’s ‘teaching’. Father James Grant is an adjunct fellow of the IPA (Institute of Public Affairs) and wrote an article in The Australian (which is paywalled) on 10 July entitled ‘It’s unchristian to oppose coal generated power’. However, we can all read the smackdown of the article and the government’s lack of action written by Neil Ormerod and published in Eureka Street. Ironically, Eureka Street is published by the Australian Jesuits, the Catholic order that Abbott tried to join when younger.

The scientific and moral debate on climate change is over. Climate change is real — we are all are causing it. So why do Abbott and other conservatives continue to ‘fight the fight’? Is it, as Pope Francis commented, because profit outweighs the common good? Abbott is probably finding it hard to justify to other countries why they should purchase greater quantities of Australian coal at the same time that our national consumption is reducing dramatically. Or is it that the government is so bereft of capability to devise and implement cutting edge policy that the easy option is (with apologies to 1914 ALP Leader Andrew Fisher) resist to the ‘last man and the last shilling’ with a determination to (in the words of Churchill) ‘never, never, never give up’.

What do you think?
As 2353 points out, the world is changing. Why can’t Abbott accept the reality when even his beloved markets are reading the writing on the wall, are reacting to climate change and the challenge of renewables? We are seeing more investment banks divesting some of their fossil fuel assets as they foresee that they will, in future, become stranded assets. And yet Abbott continues to live in a different reality and will fight the changes to the last man. How can one man be so obstinate and ignorant and yet lead our country?

Next week Ken returns to his theme of the bankers versus democracy in his piece ‘Bankers 3 Democracy 0 with Abbott running the sideline’.


Winter winds, wind farms and hot air


About this time of the year the all-year-round residents of Canberra enjoy a reprieve from the hot air produced on Capital Hill. Pity is that this usually combines with winds that come from the Antarctic via the Snowy Mountains to make Canberra shiver through another winter of sub-zero mornings! The politicians usually leave town, return to their offices and try to remind their electors why they should be returned to parliament next time with a thumping majority. It seems to be a bit different this year — government front benchers are hardly to be found.

They could be busy searching for a ‘wind farm commissioner’ who has the similar beliefs to the LNP. You may have seen our esteemed treasurer complaining about the ‘visual pollution’ from wind farm towers last September. While Hockey is entitled to his opinion, did anyone ask him why open cut coal mines, telecommunications towers, or power stations are less visually obtrusive? Abbott is clearly of the same opinion but he claims they are noisy as well!

At least wind tower poles are designed to be aerodynamic — which also brings symmetry and aesthetics to the design. The approved-this-month Shenhua open cut coal mine near Gunnedah will have approval to flatten 771 hectares of endangered local ecology, most of it box gum woodland, and no doubt carve a scar in the ground some kilometres long — clearly a better look than a wind farm in the view of Abbott, Hockey and Environment Minister Hunt.

During December 2014, the government body (in Hockey’s department) that decides which groups are permitted to claim ‘charity’ status and receive tax deductible donations revoked the Waubra Foundation’s ability to process tax deductible donations. While the reasons are not made public, the Waubra Foundation exists to claim that wind farms have health implications. The results of a study of 4000 investigations into the noise from wind farms reported last February that there was no conclusive evidence to suggest that wind farms create any health concerns — despite evidence from a Dr (her speciality is not specified) Judy Ryan:
The slow corruption of science education so that people could be fooled by the oxymoron ‘scientific consensus’ is part of politically driven global agenda orchestrated by the United Nations. We should crawl out from under its thumb and treasure our nationhood and democracy.
And this sterling contribution from Alan Scott:
The time has come for Australian politicians from all warring camps to speak the truth to their electors, rather than mouthing the party lines handed down to them by their United Nations masters.
(The links to the actual submissions are contained in the SBS News article above.)

Perhaps instead of giving conspiracy theorists the time of day, Australia’s Wind Farm Commissioner, when appointed, should start an enquiry into how to harvest the hot air emanating from Capital Hill using a number of wind farm turbines and storing it in available battery technology. S/he could determine if Parliament House could be removed from the National Electricity Grid. Even better, if all the staff and politicians caught buses to work, the batteries could be installed in the car parks to retain the aesthetics of Capital Hill (as well as allowing the ACT government to reduce the subsidy to its bus operations).

Clearly the Wind Farm Commissioner is required urgently and cannot be delayed due to the winter hibernation in Canberra as this clip explains.

The cultural war against the ABC is clearly top of mind for our government. The Australian Broadcasting Corporation hasn’t comprehended it is supposed to be the government’s media mouthpiece in the same way that Pravda was to the old USSR.

It seems that the ABC is a thorn in the side of most sides of the political landscape at times — as Mark Scott (ABC Managing Director) has correctly pointed out in response to the ‘crime’ of allowing a person with a less than impeccable past to ask a live question of a government minister on the Q&A program late in June.

After the ABC followed their normal process and ran a repeat of the show in question during daylight hours a couple of days later on one of their digital channels, Abbott was very quick out of the blocks to demand that heads roll for the gross insult (do you suspect he wanted to use the word ‘insubordination’?). As Scott noted in the same speech to the Centre for Corporate Public Affairs:
"But even for the ABC, things seemed to have been taken to a new level when on Wednesday we scored four covers in one day in the News Limited tabloids, complete with photoshopped ABC flags being waved by jihadi protestors," he said.
Scott went on to question why ‘the question’ was such an outrage when the same person had featured in articles in The Australian and The Courier Mail (both News Corp products) in the past few years with no apparent controversy.

Nevertheless, the Abbott government wants (the presumably lefty pinko) metaphoric head of the ABC on a platter and announced there will be an inquiry. The ABC Board gets in first and appoints Ray Martin (former reporter, tabloid current affairs and chat show host) and Shawn Brown (former SBS managing director) to investigate if there is any bias in the Q&A program. Abbott bans ministers from appearing ‘for a while’ — probably until the inquiry is completed or the Q&A show is transferred into a different division of the ABC that has a different view of balance and equity.

Agriculture Minister Barnaby Joyce was the first ‘victim’ of the boycott on 6 July and Malcolm Turnbull also complied on 13 July — John Hewson was invited to take his place as he is not susceptible to Abbott decrees. The ALP has a history of boycotting media as well: in 2012 it boycotted the 2GB radio program hosted by Alan Jones after he made a particularly cruel and heartless attack on the then Prime Minister Julia Gillard. At the time, then Opposition Leader Abbott said the comments were offensive,
But when asked whether he would boycott Jones' show, he said he would not. It was all about the numbers.
"I am certainly not going to ignore an audience of half a million people in Sydney," Mr Abbott said.
Joe Hockey, then the shadow treasurer, agreed.
Ray Martin, in a guest hosting spot on Channel 7’s Sunrise program early in July called the Q&A ban ‘silly’ and almost immediately faced calls from two coalition senators to stand down from the inquiry:
Senator McGrath said: "I think he should step aside. His comments make him appear to be an apologist for Q&A rather than someone who will conduct an independent review."

Senator Macdonald said: "Ray Martin has respect in the community but these comments make you question whether he is the right person to conduct an independent review.”
News Corp joined in the baying for blood by publishing a piece from their well known balanced, considered and independent writer/broadcaster Andrew Bolt, as well as the front pages referred to by Mark Scott above.

Our frontbenchers would probably not be in Europe on a ‘study tour’. You also may have noticed in the news there are economic problems in Greece that may affect the European Community. The Greek public recently voted against further austerity so that the country could start to repay debt to a consortium of banks. The ‘anti-austerity’ Greek government then went into negotiations with the rest of the EU and agreed to harsher restrictions than the public rejected! Regardless of the final outcome of the ongoing story, elected Australian frontbenchers wouldn’t want to be stuck anywhere near the south of Europe while there is considerable instability. Apart from the lack of things to study in a country that apparently can’t pay its debts (remember the ‘debt and deficit’ disaster is ‘so last year’ in the view of Hockey and Abbott), who knows, they may not be able to get back to Australia in time for the resumption of hostilities on Capital Hill next week.

There is continual brouhaha regarding marriage equality? Senator Wong bluntly reminded Senator Abetz recently that the majority of Australians don’t think you need either a marriage certificate or a traditional mother and father role to successfully raise children.
The Labor senator said the debate in the Australian community about gay marriage was currently “much more charitable, much more respectful, much more tolerant and much kinder in many ways on this issue than the members of our parliament”.
Seeing the failure of that particular argument staring them in the face, the government retired Senator Abetz from the play and substituted Barnaby Joyce. Joyce’s argument held even less credibility:
Some parts of south-east Asia could view Australia embracing same-sex marriage as “decadence”.
While news may take a while to reach the north west of NSW, which Joyce now calls home, New Zealand, Canada, and the US, amongst other countries, have marriage equality — in some cases for periods of up to a decade — and South East Asian countries still trade and deal with these ‘decadent’ countries on a daily basis. Regardless, it does take time and resources for government frontbenchers to make such informed comment to the debate that the majority of Australians seem to regard with a ‘meh’.

Are the frontbenchers sitting on the sidelines waiting to make a valuable contribution towards justification of the new Border Force Act? The Act apparently contains ‘secrecy’ laws around the possibly legal offshore detention policy for asylum seekers — a concept supported to an extent by both sides of politics. Apparently if anyone in Australia reports (one assumes unfavourably) on the conditions or treatment of asylum seekers held by the Australian government in Nauru or Papua New Guinea, they can be imprisoned. The government, through the newly named Australian Border Force Agency, disputes this. George Newhouse, writing in The Guardian (based in the UK), however, answers the government’s claims here.

Bill Shorten (Opposition Leader) faced the Royal Commission into Trade Union Governance and Corruption during July. While Shorten didn’t come out unscathed — there is the matter of the $75,000 donation to his election campaign eight years ago that wasn’t declared until early in July 2015 — Katherine Murphy writing for The Guardian reported:
This is how politics works, Shorten told the commission with a resolute tone and nothing approximating a flinch or a flicker of self-doubt. He’s absolutely right. This is how politics works. This conduct, and other conduct like it, is widespread and endemic. If you lack the self-belief to hustle, if you lack the network to fundraise, and if you lack the stomach for inhabiting a universe crafted in a material called grey area and powered on compromise, you really aren’t party or government material.
You could suggest that the strategy to discredit Shorten worked ... until someone looked at Speaker Bronwyn Bishop’s travelling allowance claims.

Bishop the elder should have known better than to charter a chopper at taxpayer expense for an 80km flight above the freeway from Melbourne to Geelong to attend a party fundraiser. The helicopter memes that have appeared everywhere from Facebook to News Corp papers in the last week or so are clever but starting to get a bit obvious.

Now the discussion is turning to who else has their ‘snouts in the trough’. A prime candidate seems to be Treasurer ‘it doesn’t pass the sniff test’ Hockey who is accused of paying rent on a Canberra house where the landlord is his wife and making a number of trips to Cairns while shadow treasurer with time allowed to inspect his (now on the market) property near Malanda on the Atherton Tableland, west of Cairns. Here’s a hint to Hockey: when Andrew Bolt is ‘oh dearing’ a conservative MP such as yourself, you have a problem.

The Premiers and Chief Ministers joined Abbott for a COAG retreat to reinforce our commitment to act against the threats to our community from violent extremists, family violence and the drug ice. New South Wales’ Premier Baird (who doesn’t have to face an election for nearly four years) opened a discussion on increasing the GST rate to 15% — strangely enough you can probably guess the headlines after the press conference which was also notable for the display of nine flags to signify greater importance than other announcements with less flags in the background!

The ALP held its National Conference in Melbourne last weekend. Shorten announced before the conference that the ALP would aim for a mandated 50% renewable energy use by 2030 as well as supporting an asylum seeker boat turn back policy as if they were done deals. If the outcomes are known before the conference starts, why the display of discussion and debate unless the party wants to further the impression that they do not agree on everything. Their media friends also get the chance to use headlines such as ‘Bill Shorten wins freedom to use boat turnbacks, but leadership split on issue’ without having to chase ALP leaders all over Australia for comment.

Agriculture Minister Barnaby Joyce did come out of hiding to disagree with the approval of the Shenhua mine (which is inconveniently in his electorate). Abbott claimed that Joyce was speaking as the local member — Joyce disagreed. Maybe Joyce doesn’t really see the difference between the aesthetics of wind farm towers so hated by Abbott or Hockey and open cut mining scars in the ground.

If you’ve got this far, you may wonder why anyone would be concerned what our elected officials do while there are long recesses in Canberra. There is a really simple answer. Towards the end of June, I sent an email to a ‘frontbench’ senator in my state as well as my local ALP MP. At the time of writing this I don’t have a reply from the senator, which I believe I deserve, as effectively I am one of the two million or thereabouts electors in Queensland who employ this senator. The MP has rung me to discuss the email I sent.

Frontbench senators could not be rude enough to ignore an elector’s genuine question, could they? Is the senator so caught up in waiting for instruction from LNP HQ on when he can leave the imposed seclusion to fire the next salvo in the political war, he hasn’t had the time to develop a factual and honest answer to a simple question regarding funding for an enquiry into the ABC? Although he could also just be dusting his bookshelves.

What do you think?
As 2353 suggests there are many issues to talk about but few heads appearing above the parapets, and yet they are so busy they don’t have time to answer his email. Well, next week they will be back in Canberra and will have to show their faces and be accountable.

Next week Ken takes a look at the latest craze, ‘Doin’ the GST-a-rosy-rag’ in which politicians seem to take turns to place changes to the GST back on the agenda.


Where will we be in 50 years?


In the next few months, most Australians will be considering their financial affairs and the preparation of their annual tax return. It is usually a time for some questioning around how you did manage to spend all that money in the past year and what changes you can make to become thriftier in the upcoming year.

Most of us get so involved in the day to day activities that govern our lives, we have little inclination or time to think about the long term. It is also a truism that those who forget their history are bound to repeat it. Those who look at the long term can see patterns and trends that escape us mere mortals. Those long term thinkers — usually called Futurists — can give a valuable insight into our future based upon reflection and observation of what has occurred in the past. The results can be fascinating and worth thinking about.

Taking the reflection theme to heart, let’s look at where Australia has come from and where we as a society are heading. So go and prepare a beverage of your choice, click on this link for one of the better ‘80s Australian pop songs and read on while we discuss ‘where will we be in 50 years’.

Apart from the convenient segue to a song, there is a good practical reason to choose to look 50 years into the future. There seems to be a 50 year (more or less) cycle in Australian economic and immigration history going back to the days when Australia was comprised of six (sometimes friendly) colonies. It is a cycle of boom and bust — boom when we are using the land to produce riches beyond compare and bust when the rest of the world has moved on from our particular riches, and Australia has not adapted. There is a moral overtone here as well: it appears that we as a society welcome new immigrants during the ‘lean’ years, and throw up barriers to their entry when we are booming.

In the 1880s, the city with the highest per capita income in the world was Melbourne. While the streets were not literally paved with gold, they might as well have been. Next time you are in Melbourne have a look at the expansive and quality buildings built towards the end of the 19th century (which fortunately still exist), as well as the good quality housing stock in the inner suburbs originally from the same era. The impressive thing is that the ‘working class’ could afford to live in an expensive place.

The wealth of Melbourne was based on the mining of gold in the (then) colony of Victoria that commenced in the 1850s. Ballarat and Bendigo were the centres of the gold industry and also have a rich history of 19th century buildings to admire. Gold was the method of exchange in the day and extracting it from the ground increased the wealth of everybody in the colony. In 1852, it was estimated that mining comprised around 35% of the Victorian colony GDP and wages in Victoria rose by 250% between 1850 and 1853. Not that Victoria was alone. Gympie, in Queensland’s south east, boomed after the discovery of gold in the late 1850s and with some justification claims to be the ‘town that saved Queensland’ during the early years of the new colony — as Queensland was technically bankrupt.

By the mid 1860s, the initial boom was over. Immigrants to the gold fields were not only from the same or other colonies, there was a significant immigration from overseas. While the English, Scottish and Americans that immigrated to the gold fields could blend into the cities and towns to find work, the Asians that immigrated (predominantly Chinese) could not and, once the money stopped flowing, their different appearance, customs and language made it easy for those that were suffering unemployment to single out and victimise.

By the early 1890s, the six colonies that were to form the Commonwealth of Australia within a decade were feeling the effects of a long drought that caused a recession and industrial disruption (as well as the formation of the Australian Labour Party at Barcaldine in 1891 during an ongoing shearers’ strike). The South Australian premier at the time said:
I regard as second only to the necessity of protecting our shores against actual invasion, the necessity of protecting Australia against the influx of aliens, Asiatics, criminals, paupers, and other undesirable classes
By the 1890s, the gold rushes were back, due in some part to the availability of capital (from the UK) that could not be used elsewhere due to an ongoing economic conditions in Europe and the Americas. As a result, Charters Towers in northern Queensland was a town of over 20,000 at the turn of the century and had its own stock exchange. It was also considered necessary and economically viable to build a water pipeline from near Perth to Kalgoorlie in the last few years of the 1800s so that the extraction of minerals — again primarily gold — could continue apace. While the Charters Towers Stock Exchange is a shopping arcade today, the water pipeline in WA is still in daily use.

In 1901, the Australian colonies federated and became Australia. In the then population, 98% of Australians were of British heritage (70% born in Australia) and one of the first pieces of legislation through the Australian Parliament was the Immigration Restriction Act — later known as the White Australia Policy.

Even though 98% of Australians had some British ancestry, it didn’t stop the Australian government interning those with ‘enemy’ bloodlines during World War 1. As various trade agreements and imports from Germany and Austria-Hungary were seen as ‘unpatriotic’ and the Australian economy benefitted from product substitution, higher output and the associated profiteering, Australia encouraged immigration (from the ‘winning side’) post World War 1 and like most of the world was caught up in the Great Depression at the end of the 1920s. People again began to feel threatened by immigration and joined local versions of the New Guard (remember Francis de Groot who ‘unofficially’ opened the Sydney Harbour Bridge) and the Communist Party. While both groups were ideological chalk and cheese, they both wanted ‘strong’ government who would keep Australia for Australians.

The economic pattern continues through World War 2, the 1950s and the Snowy Mountains Scheme, the 1960s’ ‘Credit Squeeze’; the largesse of the Whitlam years and subsequent contraction under Fraser and so on to the current day where Australia has not had a recession for over 24 years.

The immigration pattern continued from the propaganda fuelled racism in World War 2, through the ‘new Australians’ that largely supplied the labour for the Snowy Mountains scheme as Australia was rebuilding after the war — until there was a return to restrictions in the 1960s when we were booming after overcoming the ‘credit squeeze’ early in the 1960s. Malcolm Fraser to his eternal credit (with support from politicians in general) assisted a large number of South East Asian asylum seekers to come to Australia in the late 1970s (we had contributed to bombing their country almost to oblivion after all), when we were still suffering the after-effects of the oil crises and stagflation. Over the past 10 years, as our prosperity increased, the rhetoric from politicians to restrict immigration increased again to the ludicrous situation where the government of this country apparently implicated all of us as people smugglers by paying cash to those that profit from the miserable conditions endured by asylum seekers coming to Australia by fishing boat.

So we as Australians have a choice. Are we going to perpetuate a pattern of history that is, if nothing else, racist and economically irrational or are we going to break the mould? There does seem to be a correlation between economic activity and immigration. At the time of writing, the official cash rate is 2%; the government is allowing immediate tax write offs of $20,000 to kick some life into the economy; and, while the US seems to be coming out of a prolonged economic downturn, there are some real and structural economic problems in the Eurozone.

Australia seems to have an economic choice. As a nation we can continue to believe that our current export markets will again expand which is highly unlikely —

  • China is buying less coal than previously and plans to decrease consumption of fossil fuels by at least 20% between now and 2030.
  • India plans to reduce significantly (or even eliminate) the importation of thermal coal within two to three years.
  • NASDAQ reports falling demand and prices for iron ore exports

  • Or Australia could look at the new economy — such as renewable energy or even computer games:

  • The Queensland Government and US Navy are discussing using biofuel grown and produced in Queensland.
  • Australian computer games producers are asking for government assistance to expand

  • Instead our current prime minister is more intent on appointing a wind farm commissioner because they look ugly. In the words of President Obama:
    But we also inherit the beauty and the joy and goodness of our forebears. And we’re on this planet a pretty short time, so that we cannot remake the world entirely during this little stretch that we have. … But I think our decisions matter. And I think America was very lucky that Abraham Lincoln was President when he was President. If he hadn’t been, the course of history would be very different. But I also think that, despite being the greatest President, in my mind, in our history, it took another hundred and fifty years before African-Americans had anything approaching formal equality, much less real equality. I think that doesn’t diminish Lincoln’s achievements, but it acknowledges that, at the end of the day, we’re part of a long-running story. We just try to get our paragraph right.
    It seems that the first sign of a coming decline in our lifestyle is the imposition of barriers against 'unsuitable' immigrants, be they boat people now or Chinese in the 1860s.

    This government (with support from the ALP) has been attempting to remove the legal rights of people to claim refuge in Australia. The previous ALP government wasn't much better.

    At the same time, it seems that our major exports, minerals and other primary produce are finding greater difficulty in attracting and retaining overseas markets. The government’s tax concessions to small business as well as official interest rates indicate that Australia's economic conditions are flat at best. There is even an iron ore price war occurring in Western Australia between BHP and Rio Tinto to move product. All of this would suggest that economic times will get worse rather than better in the next few years.

    When it comes time for others to judge our paragraph in Australia’s history, wouldn’t it be nice for those in 50 years time to recognise our generation as the one that observed there was a pattern and chose the sustainable alternative of assisting people in fear of their lives, value adding exports of high technology devices and supporting those in our society that need help?

    What do you think?
    2353 suggests that we actually first act to identify and restrict ‘unsuitable’ migrants while times are still good. Is that greed? Do we just not want to share our success? And does that blind us to changes? Do we not see our future economic opportunities because we are so caught up in our success that we inevitably slide down into the ‘lean’ years again? — and realise we need migrants to help rebuild. A cycle that 2353 hopes we can escape — once we recognise it.

    For the next two weeks we will be presenting something a little different — an historical approach rather than opinion. We are taking advantage of the parliamentary winter recess to present a two-part piece by Ken on “How did we get a multi-party Westminster system?” In the first week Ken looks at how parliament developed in England and the historical creation of some written but many unwritten rules about how it operates. In week two, he will look at the Australian Constitution and how that reflects the English system by a mixture of law and the accepted unwritten rules (conventions).


    The politics of marriage


    While Australia had a uniform Marriage Act from 1961 until 2004, there was nothing specific (except for common law) that prohibited marriage of two people of the same gender. The requirement that marriage was between a man and woman was only inserted into the act by the Howard Government. The government at the time claimed the change was to clarify the term ‘marriage’. The 2004 amendments were introduced in the final two sitting weeks of parliament and only a few months after the UK introduced its Civil Partnership Act. The Australian amendments were supported (nominally at least) by all political parties except the Democrats and the Greens.

    During 2009, the Rudd government legislated changes to allow ‘civil unions’ to be recognised for all couples (regardless of the partner’s gender) as well as formally recognising rights for de-facto couples. Something like 85 pieces of legislation were changed to allow this to happen.

    In February 2012, Fairfax Media reported that two thirds of Australians were in favour of same-sex marriage. By July 2014, there was 72% support. Greens Senator Hanson-Young has had a bill before parliament since 2010 and there have been various attempts to change the law since.

    On 1 June 2015, Opposition Leader Bill Shorten introduced a private members bill into the House of Representatives that would delete the words inserted by the Howard government’s 2004 amendment to the Marriage Act as well as other sections that prohibited marriage equality or similar marriages solemnised overseas being recognised in Australia. Despite the lack of government members in the House at the time, the bill was shunted off to a committee. Tony Abbott’s response is that while marriage equality may be considered by the government in time, it is currently more important to pass the budget measures. In the same week, according to The Saturday Paper, Abbott himself is attempting to change the discussion to yet another ’national security’ debate:
    First we got senior diplomat Greg Moriarty appointed to the newly created position of national counterterrorism co-ordinator. (Sherlock fans, I regret to inform you that Moriarty bears much more resemblance to Mycroft than to his evil namesake.) Justice Minister Michael Keenan got the new title of minister assisting the prime minister on counterterrorism, and then Philip Ruddock and Concetta Fierravanti-Wells got new posts aimed at tackling radicalisation.
    Being fair to the Abbott government, it has spent considerable time both inside and outside parliament urging the ALP to allow the small business measures associated with the 2015 budget to pass — and to be fair to the ALP, passing the small business measures is something the ALP always said it would do. On 3 June, Shorten moved a motion, to a lower house almost empty of government members, to pass the small business legislation immediately. The government voted against it:
    "Let us pass this bill straight away," Prime Minister Tony Abbott said on Monday.

    "Let's get it through this place in a hurry," Small Business Minister Bruce Billson said last week.

    On Wednesday, Mr Shorten obliged.

    The government seen voting against putting their own small business budget measures to an immediate vote.

    "We are not going to delay this legislation for one minute longer," he told the House of Representatives and then put forward a parliamentary procedure that if approved would allow an immediate vote.

    The government opposed Labor's motion so it failed by 47 to 77 votes.

    The leader of the house Christopher Pyne immediately decried the incident as a stunt, because the Senate is in estimates and not sitting this week.

    "Labor are a joke. Ending the debate on small business won't get the bills to the Senate any faster – the Senate isn't in session!" he tweeted.

    "So why the calls for Labor to get out of the way in such urgent tones," Labor backbencher Joanne Ryan immediately responded.

    Small Business Minister Bruce Billson released a statement describing the spectacle as a "another pointless piece of politics by Labor".

    Speaking at a media conference in the Canberra suburb of Dickson a short time later, Mr Shorten said: "If they're in such a hurry to help small business, why were they so slow today?"

    "I think the government's got some explaining to do," he said.

    In question time on Wednesday, Labor pursued the Prime Minister, asking why his government had voted against passing its small business bills straight away.

    Mr Abbott said the Senate was not sitting.

    "What we saw from the opposition this morning was yet another childish stunt from the Labor Party, an attempt by the Labor Party to deny 11 Labor members and 31 Coalition members the right to speak on this bill and ensure that they were able to demonstrate their support for the small businesses of Australia," Mr Abbott said.
    Stunt? — yup, it probably was. It is pretty amusing that on Wednesday the government is voting against something it was calling on the opposition to pass on Monday and Tuesday. It seems that there is an alternate agenda within the government: probably something to do with a number of government members getting a speech into the Hansard appealing to a part of the LNP’s core support base — small business. Getting and keeping the front page free of the budget (after the 2014 fiasco) also reduces the risk of adverse polling for Abbott and his government — which could be construed as keeping Abbott in a job.

    Chris Berg, writing on the ABC’s ‘The Drum’ website suggests
    The budget was delivered on Tuesday, May 12. National security week was launched on Monday, May 25. That's 13 days. Really just 12, if you factor in the budget lockup and newspaper print deadlines.

    This quick hop from economics to security is indicative of a broader problem with the Abbott government's populist push. It knows it doesn't want to be unpopular. But it's not sure what it wants to be popular about.

    The 2015 budget is nothing like the political catastrophe that the 2014 budget was. If anything it has been well received. Everybody likes the accelerated depreciation changes for small business. The fiscal reckoning has been postponed, and nobody but sticklers, obsessives and economists could object to that.
    Clearly, changes to the Marriage Act don’t figure prominently in the Abbott government’s agenda. This fits with Abbott’s public pronouncements in the past, as well as the public pronouncements of other ‘well known’ government members such as Concetta Fierravanti-Wells who was recently interviewed on ABC’s PM radio program:
    Senator Concetta Fierravanti-Wells was recently given the job, in harness with Philip Ruddock, of inquiring into tough new citizenship laws.

    Today, she says allowing a conscience vote on same sex marriage would be a "cop out".

    Senator Fierravanti-Wells says it could lead to a fracture between the Liberal Party's base and its parliamentary wing.

    She spoke to James Glenday.

    CONCETTA FIERRAVANTI-WELLS: I don't believe that this issue is a conscience issue. It's not a life or death issue, which has traditionally been the purview of conscience votes.
    Thirty seven of the USA’s fifty states already allow marriage equality— although North Carolina is currently involved in a political intrigue that would surpass Game of Thrones to allow magistrates to choose only to marry those who fit their particular moral and/or religious beliefs. As the New Yorker discusses in this article, the proposed law — that was vetoed by the Republican (conservative) governor in spite of his personal support — is demonstrating signs of having the governor’s veto vetoed by the legislature! The (possibly) unintended consequence is that there could be the re-instatement of the long overturned ban on couples of mixed ethnic backgrounds marrying each other — despite the marriage being that of the seemingly all important man and woman — if the particular magistrate doesn’t approve. Apparently the US Supreme Court is currently deciding if equality in marriage will be legal in all fifty states, which may overrule the North Carolina brouhaha in any case.

    Other countries, including New Zealand and Ireland, have allowed marriage equality over the past few years. In Ireland, a traditionally Catholic country, it was put to a referendum during May 2015 and 62.1% of the voters approved the change. Ireland’s parliament now will introduce the necessary legislation by the end of the year.

    Reaction to the Irish referendum was generally positive around the world. The Canadian Broadcasting Corporation reported:
    Political analysts who have covered Irish referendums for decades agreed that Saturday's results mark a stunning generational shift from the 1980s, when voters still firmly backed Catholic Church teachings and overwhelmingly voted against abortion and divorce.

    "We're in a new country," said political analyst Sean Donnelly, who called the result "a tidal wave" that has produced pro-gay marriage majorities in even the most traditionally conservative rural corners of Ireland.
    Politicians live and die in Australia at the whim of polling data. Just ask John Howard, Kevin Rudd, Julia Gillard and Tony Abbott. Unless there is a significant problem with the data in a number of surveys, there seems to be a significant level of support for marriage equality in Australia — despite the protestations of various members of parliament (from both major parties). So what is the problem here: is it that both sides of politics are scared of making the change, or are they attempting to differentiate themselves and lose the vote from the unaligned voter?

    Shorten knows very well that his private members bill will not become law. Hanson-Young’s similar legislation has been sitting on the table since 2010 (when the ALP was in power). A number of political players have advised him that his bill wouldn’t help the process — assuming he does want the changes he has sponsored. Abbott has indicated he is prepared to allow a bi-partisan bill into the parliament for debate. The ‘problem’ with bi-partisan bills is that no political party can ‘take the credit’ for the initiative.

    There are LNP members of parliament that have indicated they will co-sponsor a bill with the ALP to make the debate happen. The experience in other countries demonstrates that changes that allow marriage equality do not cause revolution, moral decay, pestilence or any real impact to most people’s lives. Maybe if the polling is correct, both sides of Australian politics should take a reality check and listen to what the public actually want. If Ireland can ask the public and act on public opinion, why can’t Australia?

    Ironically Fairfax Media claims that changing the marriage act would cause a $1.2 billion boom to the economy. With the Australian economy almost flat-lining, perhaps it’s the boost we all need.

    What do you think?
    Apparently focus groups are showing that voters consider this a non-issue, not because they are indifferent, but because they see it as inevitable and just want the government to deal with it and move on. As 2353 points out, politicians are too busy playing games with the issue to listen to the people. As ‘the people’, speak up now and leave a comment.

    Next week Ken will take a philosophical look at national security and answer the question ‘Where does Abbott really stand on national security?’. His answer may surprise you.


    The $19,990 special

    The amount of ink spilled in the analysis of the 2015 Australian budget would probably fill Sydney Harbour. The number of electrons expended in the same way would probably light up a small town for a week. There is no need to add to the consumption of electrons here. Instead, let’s look at the sales pitch.

    To put it into perspective, there is, unfortunately, a little bit of economics that we have to endure. Australia is one of the few countries in the world to maintain a AAA ‘credit rating’. Nominally, that means that the country can borrow money at lesser cost. Australia is one of the few countries in the world that can truthfully claim that the economy has not been in a recession in the last 20+ years. Things are, however, not all rosy in the garden: while it is a positive that we do have a Reserve Bank official cash rate above 0%, it is at the time of writing a hardly stellar 2%. In fact 2% is the lowest it has ever been. The official cash rate is the measure of how much interest the Reserve Bank is prepared to pay lenders should it decide it will hold on to money that banks can’t place elsewhere (at a higher return).

    Interest rates, to an extent, also refer to consumer confidence. If consumers are confident that the economy is bubbling along quite nicely, they are more comfortable to borrow to upgrade the house, buy the shiny new car or spend the ‘rainy day money’ on a visit to Disneyland, the new lounge suite or buy the larger TV (because a 55 inch TV would look absolutely fabulous!). In a similar way if business thinks that the consumer is going to ‘walk’ into their business and make a purchase, they will be more inclined to upgrade the computer system, buy the new delivery van, upgrade the shop fittings and so on.

    The problem is that once consumers lose confidence, it takes a lot to get the confidence back. At the start of the Global Financial Crisis, the Rudd Government, on the advice of Treasury, distributed billions by way of $900 cheques. The Opposition at the time decried the extravagance claiming that some would spend the money wastefully — and produced examples of people taking the money straight to the local pokie palace or to the local electronics store to purchase the largest TV they could get. Regardless of the morality, those that work in pokie palaces and electronics stores kept their jobs as a result of the expenditure. While Rudd was trying to appeal to his constituency, the $900 cheques did keep the economy ticking along and, with assistance from other programs, did keep Australia from tipping into recession. The pumping of the economy by the Rudd/Gillard Government also retained consumer confidence — people were prepared to go out and spend the windfall. The other parts of the Rudd/Gillard package prolonged the demand through both quick and long term infrastructure improvements to people’s homes (while assisting to reduce energy usage and costs) as well as considerable new infrastructure to schools, health care providers and so on. Human nature being what it is, if people have a reasonable expectation of receiving an income next week, they will not conserve every cent they have this week.

    In contrast, prior to the 2014 — it’s going to be tough — budget, Hockey and Cormann were pictured smoking cigars. The reason for the ‘toughness’ that was to be imposed on the community was claimed to be due to the ‘debt and deficit disaster’ inherited by the Abbott Government.

    Regardless of the truth of the ‘debt and deficit’ claim, Hockey killed consumer confidence. The marketing of the budget in 2014 resulted in News Corp publishing an article like this, dryly listing the adverse effects of the budget on ‘the average person/family’, such as:
    IF YOU NEED TO SEE A DOCTOR WHO BULK-BILLS ... All the rumours were true. From July 1, 2015, you will have to pay a $7 “patient contribution” fee each time you visit your GP.

    You’ll also get slapped with that charge when you visit out-of-hospital pathology and imaging services, such as getting an X-Ray or an MRI.

    Concession card patients and kids under 16 years will only have to pay the contribution for their first 10 visits a year.

    Doctors have discretion to choose who pays the fee, but there is a catch.

    If GPs choose not to charge a patient, they won’t receive their $6.20 bulk billing consultation payment from the government.
    While Abbott and Hockey were effectively telling us all to swallow our medicine, they were showing a distinct inability to get budget measures through the Senate. The ABC reported in late May 2014 that Hockey was threatening that interest rates, as well as taxes and charges, would increase if the budget measures did not pass the Senate. History will tell us that a lot of the measures that weren’t passed by the Senate were quietly rescinded in the 2015 Budget. We also now know that the official interest rate set by the Reserve Bank fell over the period of the 2014 budget to the lowest level ever — 2% — causing the Chief Executive of CPA Australia, Alex Malley, to comment, as reported in The Saturday Paper:
    “A 2 per cent interest rate is another way of saying there’s no pulse in the economy,” says Malley.
    So then we come to Budget 2015. If Hockey and Cormann shared some time smoking cigars again, it certainly wasn’t in public view. Hockey returned to his ‘genial Joe’ persona pointing out the benefits to all from the latest budget. Sophie Morris, who wrote The Saturday Paper article linked above, observed:
    In an extraordinary about-face, Hockey has gone from being the treasurer who helped destroy consumer and business confidence last year, with a tough budget and talk of “debt and deficit disaster”, to an enthusiastic hawker going all-out to try to rekindle it. He’s throwing himself into the task with all the gusto of a steak knife salesman on daytime television.
    In an interview with one of the ‘doyens’ of the Australian media, Laurie Oakes, Hockey was asked what happened to the ‘debt and deficit disaster’ last year since there has been little improvement in the Australian Government’s budget position:
    Hockey replied: “Well, we made significant progress last year, Laurie, and that’s underestimated, but we actually have come a long way. Now we are on the next stage of our plan to build growth, and we’re investing.”
    You could also question if the change in attitude was somehow influenced by the last 12 months of opinion polls, as evidenced by the commentary that the 2015 budget has ensured the ALP would now win an election by a smaller margin than for most of the past 12 months.

    The ‘highlight’ of this year’s budget is the $20,000 immediate write off for asset purchases by small business. The plan apparently is for small business to go out and purchase business related equipment — which in turn means money is pumped into the economy, people in the businesses that supply equipment to small business retain their jobs and go out and spend their income to inject further money in the economy. Of course it is a complete coincidence that the strategy is similar to the Rudd/Gillard strategy to address the GFC, which the LNP so roundly criticised at the time for being economically reckless. There are some differences of course: Rudd/Gillard were responding to a worldwide event; Abbott and Hockey are responding to an event of their own making. Both political parties are of course favouring their preferred demographic.

    It appears, however, that the ‘sales job’ to unaligned Senators in 2015 is no better than it was last year. Fairfax Media is reporting:
    Almost three weeks into its budget sales job the Abbott government is still struggling to secure Senate support for some of its key proposals, leaving billions of dollars of savings in doubt.

    The government's age pension changes, childcare package, cuts to paid parental leave and plan to impose a one-month wait for the dole all still face an uncertain fate in the upper house.

    While crossbench negotiations are set to ramp up even further in the coming weeks, it looks increasingly likely the government will be forced to abandon or heavily amend some of its plans. The latest crossbench talks come after the Parliamentary Budget Office warned Senate intransigence could carve a $100 billion black hole in revenue in the next decade.
    Abbott, Hockey and others have accused the Rudd/Gillard Government of spending excessively, in turn making the dramatic spending cuts of the last two budgets prudent and necessary. For a number of years, this ‘self-evident’ truth has been accepted at face value by a large proportion of Australian media (and the community). It is clear that the unaligned Senators have thought differently when disallowing a number of the revenue measures proposed by Abbott and Hockey.

    It is perhaps ironic that the elected Senators of Australia have demonstrated the sales pitch doesn’t convince them and the ABC’s FactCheck unit determined that Abbott and Hockey are now spending more that Rudd/Gillard did. Hockey’s sales pitch this year is better, but the budget is still about ideology rather than improving the status and wellbeing of our society.

    What do you think?
    What can we expect from this government except a litany of failure? 2353 points out that in selling their two budgets they have shown that they couldn’t sell a glass of water to a thirsty man. Worse, they demonstrate their hypocrisy with an approach in 2015 that they roundly criticised when in Opposition and is the polar opposite of their own approach in 2014. Can they get any worse? Let us know what you think.

    Come back next week when 2353 will consider the politics of the marriage equality issue.


    NAPLAN — a guide or a competition


    Most educational institutions in Australia have a ‘tag line’ — a statement that is supposed to be a pithy description of what the entire school community believes in. It isn’t surprising that a lot of the ‘tag lines’ have something to do with recognising the individual talents of each student and working with those talents to develop self-reliance and the ability to cope with whatever circumstances arise in the future. In other words, a lot of educational organisations claim that each student is a unique individual, with recognition made for the different life skills, aspirations and capabilities in their future lives — and is treated as such.

    So to assist the educators in respecting each child as an individual, we as a society make the million or so Year 3, 5, 7 and 9 students in the country sit a standardised test every year. Counterintuitive isn’t it? The testing takes place over thee days (in 2015 the dates were 12, 13 and 14 May) and is called NAPLAN.

    The claim is standardised testing ‘supports good teaching, valuable data and school improvement’. The data is also used on the Myschool website. According to the NAPLAN website:

    NAPLAN is not a test of content. Instead, it tests skills in literacy and numeracy that are developed over time through the school curriculum. Excessive test preparation using previous tests is not useful.
    So what is standardised testing? Wikipedia will tell you that:

    A standardi[s]ed test is a test that is administered and scored in a consistent, or "standard", manner. Standardi[s]ed tests are designed in such a way that the questions, conditions for administering, scoring procedures, and interpretations are consistent and are administered and scored in a predetermined, standard manner.
    Standardised testing has a place in society. Medicine is put through a number of standardised tests prior to release to ensure that the health benefits outweigh any short or long term negative effect. Vehicles are crashed into concrete walls around the world to assess their safety should the vehicle unfortunately replicate the incident on the road with people inside it. Food, drink and many other substances are also tested to reduce or eliminate ill effects. Generally speaking, science knows that if a person ingests a known quantity of a pain relieving medication, it will perform certain actions in the body to give the effect of less pain. It’s the same with food, drink, detergents and so on — there is a certain amount of chemical that is considered to give a beneficial effect with little or no adverse side effects. Modern vehicles with engineered crumple zones and airbags also protect a human’s biology, so they can walk away from a crash that in the past would have caused severe injury or death.

    That our medicine, motor vehicles, food, drink and other substances are subject to standardised testing is to be applauded and ensures our safety. Testing at this level also looks at our biology and how it interacts with external influence — not how our intellect is affected with stimulus.

    If every school student in Australia were being prepared to be a statistician, standardised testing would be a useful method to ascertain if progress was being made. You could also argue that if everyone in Australia was a statistician, there would be a lot of necessary work that wouldn’t be done — and we probably don’t need more statisticians in any event.

    Australians have a large variety of roles and obligations. While the country does need statisticians, we also need farmers, transport operators, sales assistants, office workers, teachers and a host of other professions. You might be able to argue that we also need politicians — after all ‘someone’s got to do it’!

    Although we need a variety of people with different skills to run our society, there is probably an argument for the imposition of a standardised test across the country to determine that people can read, write and have a degree of numeracy as they leave school. Which would be fine if that’s all it was used for.

    A few paragraphs earlier, I mentioned that the NAPLAN results are being fed into the school data that are freely available on the Federal Government’s Myschool website. Humans are a competitive species; accordingly, some will look for any advantage to give their children a perceived competitive edge. While the Myschool website is not supposed to be a ranking table

    … the results have now become an informal selection test, taken into consideration by schools when accepting new students. For another, schools and parents have come to regard the test results as an absolute measure of education delivery.
    The logic that your child will obtain a certain result because similar results were achieved in previous years is fatally flawed as it doesn’t take into account the very real probability that different cohorts of students have different abilities and skills, despite the educators teaching to the same script. Again, each person is an individual. If for example, the school that Einstein or Steven Hawking attended was subject to the NAPLAN process, it is likely that the result would be skewed as the particular cohort went through the school; others would have excelled as well due to the interaction between Hawking or Einstein and those around them on a daily basis.

    If we are testing mathematical ability, standardised testing may have some validity — after all if the answer is 42, it is what it is. The only variable is if the student showed how they worked it out, or guessed the answer. While numeracy is tested, so is the student’s reading, writing and language (spelling, grammar and punctuation). Writing on the Fairfax website, Emily Frawley suggests:

    NAPLAN's persuasive writing tasks do not showcase the skills teachers value nor those students need to master.
    There would be a great deal of difficulty in ensuring standardised marking when it comes to persuasive writing for a test administered across Australia. While there would have to be a moderation system in place at the end of the day, most students would have a result based upon one educator’s view of their writing ability. Those that write professionally (and amateurs like me) will tell you that, while there is considerable thought put into each piece of persuasive writing, each reader will approach the writing differently, taking a different message from the text.

    So do teachers teach what the student will need in real life or do they teach for the test? While you would like to hope that the NAPLAN was used in the way it was intended, evidence would suggest that some believe it is the be all and end all of education in Australia. The government body that oversees NAPLAN does have some practice papers on the website but will not release past papers (claiming copyright). There are however plenty of others that will step into the breach when there is a perceived need in the market, as this discussion on the Whirlpool Internet forum shows.

    While schools can use the NAPLAN data to improve teaching practices for their students, parents have the right to withdraw their children from NAPLAN testing. The ACT Education Directorate is concerned about the high number of parents doing so in the ACT (they claim it is due to a philosophical objection). The ABC however suggests there could be other factors at play here. The High School Principal’s association has called for the removal of NAPLAN data from the Myschool website to reduce the possibility of the NAPLAN results being used as the sole determinant of future schooling by some parents.

    Perhaps the Year 3 teachers at St Paul’s Primary School in Gracemere, Queensland, have the right approach. It has been reported widely that they gave their students the following note:

    The NAPLAN Letter

    To our dearest students from Year 3,

    Next week you will sit your first Naplan test. Before you take this test there is something very important for you to know.

    This test does not assess all of what makes each of you exceptional and unique.

    The people that score these tests don't know that some of you love to sing, are good at drawing or can teach others how to use a computer program. They have not seen the way that some of you can dance with grace or speak confidently to a large group. They do not know that your friends count on you to be there for them when they are sad. They do not know that you participate in sports, help your mum and dad or that you play with your little brother, sister or cousins. They do not know that you are caring, thoughtful and that everyday you do your best. Because these attributes cannot be tested.

    The scores you get from this test will tell you how you did on that day, but they will not tell you everything. They can't tell you that you have improved on something that you once found difficult. They can't tell you that you brighten up your teacher's day. They can't tell you how amazingly special you are. So come to school ready to do your best for the Naplan test and remember there is no one way to 'test' all of the wonderful things that make you, YOU!

    Kind regards,

    Mrs Egan, Mrs Schluter and Miss Bailey
    While the note is alleged to be based on a similar item some years ago that originated in the USA, it is a sharp reminder that all the million or so students that recently sat the NAPLAN program in 2015 do have talents, skills and the right to the education they need to be their best. We can’t all be rocket scientists (or statisticians); not all of us have the skills or the desire. We all do have the skills and abilities to be an effective member of our community and wider society. Testing is probably a part of the process. Isn’t it better for well trained professional teachers to assess the capabilities of each student in their charge and implement strategies based on the individual teacher and/or their colleagues’ experience to bring out each students best?

    What do you think?
    While NAPLAN has become an integral part of our education system, is 2353 right in suggesting we are misusing it? Did the government make a mistake when it included the NAPLAN data on the Myschool website? Let us know what you think about NAPLAN.

    Next week Ken looks at the Greek debt crisis and sees embedded in it a battle between capitalism and democracy in his piece, ‘The unhappy marriage of democracy and capitalism’.

    Hope for the homeless


    Throughout the world there are people who ’sleep rough’ every night. For a few, that is the way they choose to spend their lives; for the majority, however, the habit is not one of choice or desire — the choice is made for them due to circumstances relating to employment or their personal lives. While Australia is not immune to this social problem, generally those in Australia who are sleeping in the park, under the bridge or in their car do not suffer the climatic extremes as those who ‘sleep rough’ in other parts of the world.

    Homelessness or living in cars and so on is not just a problem because it ‘makes the place look untidy’: it is an indicator of how society looks after its members who have usually hit the bottom — and are looking for some help to re-establish their lives — frequently as a result of circumstances the person had no control over. A network of organisations attempts to assist those who are homeless as well as those who through misfortune are likely to become homeless. Most of the organisations that provide this service in Australia are owned and operated by the non-government sector (some of these organisations do receive government support but nowhere near enough and most have suffered cuts since the Abbott government came to power). As you would expect there are organisations in other countries that perform similar activities — some of which use a counterintuitive process with great success thanks to government funding.

    There are a number of practical issues when you are in a position where you don’t have a ‘usual’ address, a bed to sleep on at night and all that is represented by having a roof over your head. Probably the most important one is there is no certainty in your life — you literally don’t know where your next meal is coming from, if you will be safe if you do fall asleep, where you will find a place that is sheltered that evening and what tomorrow will bring. In addition, your family does not know where you are; services such as Centrelink require an address to ‘put you on the books’ and access to a computer to receive correspondence; and employers will react to you far more favourably if you take some care with your personal hygiene (a bit hard if you don’t have access to running water) as well as having conventional contact details. If you do manage to scrape together enough for the bond and rental for a property, the real estate agent, under the guise of looking after the interest of the property owner whom they represent, will generally require a reference from a previous landlord prior to renting you a property to live in — a bit hard if your previous address was the third park bench from the light pole.

    Anglicare recently published its 2015 rental affordability snapshot as a continuation of the process it has followed for at least the last four years. In 2015, the survey looked at 65,614 properties across Australia and measured where a tenant in the bottom 40% of household income distribution would spend greater than 30% of their disposable income to rent a place to live — the definition of ‘housing stress’. The results are frightening. From the 65,614 available properties:

    • 3.4% of properties met the affordability requirements of a couple who relied on the age pension
    • 0.9% (or 600 properties) met the affordability requirements for a single age pensioner
    • 10 out of the 65,614 (that is not a typo) properties would be affordable for a single person on Newstart; and
    • 8 (again not a typo) properties meet the affordability requirements for a single beneficiary of Youth Allowance.
    It doesn’t get much better if you do have a job. Anglicare calculates that around 2.3% of the rental properties available at the time of the 2015 survey would be affordable if you are single and living on the mandated minimum wage; which is slightly over $33,000 per annum. Should you be a part of a young family comprising two adults on the minimum wage and receiving full child support and child care payments for your two children, still only somewhere around 24% of the properties surveyed would be suitable for you.

    Clearly if you are in any of the situations above, you are probably reading this on a computer you don’t own — as discretionary expenditure such as internet connections, electricity supply, car and contents insurance, car repairs and, possibly at times, even food are all dispensed with so that you can retain that roof over your head. Again according to Anglicare, around 65,000 Australians do not have the financial security to ensure that they will have sufficient food each day.

    The reality is that Australia is certainly not the worst place in the world to be homeless. Our climate in large population areas is rather benign in comparison to some parts of Europe, the USA and Canada, where some major population centres have similar climates to Mt Buller or Perisher. Despite never having been fortunate enough to travel to New York City or London, I am certainly aware of the stories of people that effectively live in subway stations and similar areas as they are (relatively) warm and sheltered — until they are ‘befriended’ by the relevant city’s transport police.

    Like in Australia, various government and non-government organisations attempt to help the homeless across Europe, the US and Canada. Some do it better than others. In addition to trivialities such as food and shelter, in cold climates across the world people are also responsible for heating their homes; the purchase of warm clothes as well as additional food to stay warm. If there is a constant battle to find shelter, clearly other requirements for life take a back seat. As an example, a CBS Television Station in Minnesota (WCCO) highlighted during April 2015 that their state government reported 43 people died during their winter where exposure to cold was either fully or partly responsible for their death. While not all these people were homeless (one died trying to rescue another person from a lake), the link does look at the fate of some homeless people. Apparently this is an improvement on previous years.

    Around 10 years ago in Utah, the Republican Governor was convinced to try a radical plan to reduce homelessness in the state — give them a home. The charmingly named Desert News reports that it saves money!
    In one of the leading examples around the nation of counterintuitive thinking, Utah has been giving away apartments to the homeless. It is a program that has actually saved Utah money. For each homeless person, estimates for emergency medical bills alone are more than $16,000 a year on average. Giving them an apartment costs about $11,000. And it has drastically reduced the need for emergency medical visits.
    Outside of medical, various other costs, including legal and justice system costs are estimated to add another $20,000 to $30,000 dollars a year (depending on the location). Utah’s housing, and support for the individuals once they are residing in a home, cuts those total costs by over half, all-in-all, from about $19,000 a year to under $8,000.
    Utah wasn’t the originator of the idea. Again the Desert News reports:
    Designed by the Utah Department of Workforce Services, the program was modelled after the “Housing First” program pioneered in New York City more than 20 years ago. This approach involves putting housing ahead of all other concerns. When followed, alcohol consumption rates have been found to go down, along with drug usage and public nuisance behaviour. Each year some 10 percent leave the program and become fully independent, and only 6 percent are ejected from the program. The rest continue to work year by year with their caseworker.
    The Washington Post recently discussed the origins, benefits and economics of the program and celebrated its success in one of the USA’s most conservative states (Utah is the home of the Mormons). Other US states such as Florida and Wyoming also operate similar programs, so the experiment is repeatable.

    If a person has a home, they are in a better position to access government services, a job application is easier (as personal hygiene is better and the potential employer has a contact point) and a person can make plans for the future. The Australian Government is in contrast withdrawing money from social service providers. Conservative states in the USA demonstrate that the current Australian Government’s policy is deeply flawed and doesn’t help anyone. At the same time, the Abbott government — to the detriment of our economy — supports processes such as negative gearing, novated leasing and capital gains.

    In Joe Hockey’s world, the homeless are ‘leaners’ as they do not contribute to society. The reality is that those that are ‘sleeping rough’ in Australia are not taking much from society either. It’s a pity some of those that Hockey would define as ‘lifters’ are shifting profits offshore or structuring their affairs so that they make a tax loss (which are all still legal activities). The example to Australia from New York and Utah’s ‘homes for the homeless’ program would seem to suggest that if those who fall to the bottom of society are given some support rather than derision, they become overall contributors to society — at the same time as they are lifting themselves out of poverty, danger and risk. All it takes is someone to give them a chance.

    What do you think?
    As he did in ‘The “trickle-down” effect’, 2353 presents us with an alternative approach that is already being shown to work. Why can’t governments see the benefit of spending money now for longer term benefits — and savings? Should Labor be picking up such approaches and showing the shortcomings in the current approach? Please let us know what you think.

    Next week Ken returns with his view of the government's budget, including the way it began selling it before budget night: 'Government budget trickery'.

    The saga of Billy Gordon


    On January 31 this year, Billy Gordon joined a very select group — indigenous members of parliament in Australia. He won the seat of Cook in far north Queensland from the LNP and joined the Queensland parliament as part of the minority ALP government. Late in March, the State parliament sat for three days and effectively confirmed that the minority Palaszczuk government had the confidence of parliament.

    Queensland parliament sits again this week. During the month of April information relating to Gordon’s past criminal convictions, structuring financial affairs to avoid the payment of child support and claims regarding domestic violence in a previous relationship were given publicity. Palaszczuk, in what could be considered to be a gutsy political move, as she needs the seat to govern in her own right, moved to expel Gordon from the ALP and pressured him to resign his seat. Opposition Leader Springborg wasn’t far behind when talking to 4BC’s Patrick Coldren. Gordon resigned from the ALP prior to the expulsion and has chosen to remain in parliament as an independent, supporting the Palaszczuk government.

    Along with a number of other jurisdictions around the world, Queensland has legislation that wipes the slate of certain criminal offences if they were committed a number of years ago. In Queensland the legislation is known as the Criminal Law (Rehabilitation of Offenders) Act 1986 and the cleansing of people’s records occurs after 10 years. Gordon’s convictions are considered wiped under this legislation. Gordon is understandably investigating legal action against those who publicised the information.

    For some reason, we expect a higher standard of ethics and morality from our politicians than we do of others. Gordon, who also ran for the ALP in the seat of Leichhardt in the 2013 federal election should have disclosed his record, despite obviously not being proud of it. As Gordon was working for an ALP senator, the ALP should have been aware of the convictions in any case. Palaszczuk certainly ‘jumped the shark’ by calling for his resignation from parliament — and we’ll get to the LNP’s response in a minute. Unfortunately it is fair to suggest that Gordon’s life story is not uncommon amongst indigenous people in north Queensland as this government report to a 2014 Crime Enquiry documents. Gordon and the ALP could have declared his history and run his campaign on the basis of how well he understood his community and was a wonderful role model because he had turned his life around.

    Up until January 31, the seat of Cook was a LNP seat held by David Kempton. The Guardian, while reporting a potential second government MP being involved in a domestic violence issue, observed:

    Meanwhile, the Australian newspaper is reporting that the Liberal National party frontbencher defeated by Gordon at the state election was behind the initial complaint made by his ex-partner.

    David Kempton, who lost Cook to Gordon in January, helped the woman make a complaint about unpaid child support in the days after the election, the paper says.

    The independent Speaker, Peter Wellington, on Tuesday said it appeared Gordon’s former partner was being “used” by political forces in an orchestrated attempt to bring down the Labor government.

    The Australian says Kempton was the first of three current or former LNP MPs to have had close contact with Gordon’s former partner in the weeks leading up to the child support allegations being sent to the premier and ultimately leaked to the media.

    The LNP MP Warren Entsch, whose federal electorate of Leichhardt overlaps Cook, has rejected Wellington’s claims but confirmed he helped the woman with the child support issue after he was approached by Kempton.

    Asked about rumours that Kempton, a lawyer, is now representing the woman, Entsch said: “He could well be.”

    Entsch defended releasing to the media details of his correspondence with the woman, including the abuse allegations and Gordon’s criminal record, saying he had been forced to act because of the premier’s inaction.

    The paper says the former LNP MP Gavin King, who until January held the neighbouring seat of Cairns, was also in contact with the woman for three weeks before the initial allegations were made public last Friday.
    We should be applauding how the LNP is demonstrating the care and concern it has for the welfare of Gordon’s ex-partner as well attempting to restore faith in the political system — Yeah right!

    At the January 31 State Election, the last seat to be declared was Ferny Grove, located in Brisbane’s north west. The seat was held by the LNP and the ALP had a small lead after the distribution of preferences. The fly in the ointment was that the Palmer United candidate was an undischarged bankrupt and therefore ineligible to stand for parliament. The brouhaha was all to do with the preferences of the ineligible candidate and if they had enabled the ALP to get over the line. With the Electoral Commission discussing whether the result should be taken to the court of disputed returns, and Premier Newman losing his seat at the election, the de-facto leader of the LNP at that stage, Lawrence Springborg, ‘kindly’ offered to run a ‘caretaker’ government until the situation became clear which, based upon the last time a similar occurrence happened in Queensland, could take seven months. William Bowe at Crikey explains the issues here and why Springborg was ‘dreaming’ (to pinch a line from The Castle).

    Australian political tragics may remember the “Utegate” affair. One of the Rudd government’s responses to the GFC was to propose an alternate vehicle financing system to support car dealers, as some traditional financiers had suddenly removed themselves from the business. Rudd was in possession of a ute donated by an Ipswich car dealer (and fellow Norman Park resident). The car dealer subsequently approached the ALP MP representing the Ipswich area for access to the alternate vehicle financing system; the MP sent an email to Treasury; and suddenly then opposition leader Malcolm Turnbull was producing evidence that the car dealer was receiving preferential treatment due to his donation of a car to the prime minister. The documentation produced by Turnbull was later proven to be fraudulent and assisted in the downfall of Turnbull’s leadership. The car dealership is no longer trading after being inundated by the 2011 south-east Queensland floods.

    At the same time as Billy Gordon was elected in the seat of Cook, Rob Pyne from the ALP replaced Gavin King from the LNP (and mentioned above as helping Gordon’s accuser) in the neighbouring seat of Cairns. Rob Pyne self-disclosed an email he received asking for details of a past conviction, which was obviously sent to him in error.

    Springborg has claimed that his party will not accept the support of Gordon: an interesting concept considering the government he was a minister in changed parliamentary procedure to one where the major parties’ whips first advise the speaker of the number of votes for and against, before the independent MPs are asked for their vote. In short, the sight of Springborg or Langbroek running from the parliament to ‘void’ the vote of Gordon (in a similar way to Abbott and Pyne running from Craig Thomson) won’t occur — unfortunately!

    There are two questions here.

    The first is the morals and ethics of those who seem to be involved in promulgating false or damaging information. Churchill is quoted as suggesting ‘A lie gets halfway around the world before the truth has a chance to get its pants on.’ Are the various constituents of the conservative political parties in Australia so morally bankrupt that the ends justify the means or are they so simplistic that they believe that people will swallow the information provided without question? While there is no doubt the ALP would have damaging information on many LNP MPs across the country, they seem not to publicly release information that is irrelevant to the MP’s current role in life.

    The second is how do we expect the disadvantaged to gain a voice in the management of our society unless past ‘sins’ are forgiven. Alecia Simmonds, writing on Fairfax’s ‘Daily Life’ website states the case far more eloquently than I can:

    That Billy Gordon may also be a product of a racist society where Aboriginal and Torres Strait Islander people are poorer, sicker, more disadvantaged than any other group in Australian society seems to have escaped us. In our rush to pronounce upon his character we have strangely forgotten about his context; one where one in every 43 Aboriginal adults are in prison and Aboriginal people are eight times more likely to be taken into police custody.

    It's hypocritical for us to ask Aboriginal politicians to redress their communities' problems and then be shocked when it turns out that they have experienced those problems. Or, in Gordon's case, that they are living examples of them. Many, like Gordon, may come from what he calls a 'troubled and fractured past.' And his past is our own past; Australia's 'troubled and fractured' history of colonisation.
    While arguing that, if in fact Gordon is convicted of domestic violence, he should resign, Simmonds finishes her article with:

    Finally, if we are to ask politicians to tell voters about their criminal pasts then I would suggest that we also ask politicians to tell voters about any civil matters that they've been involved in. Because it doesn't take a genius to work out that we have two systems of justice in this country: one for the rich and one for the poor. If you're a sandstone-educated white man, sipping mimosas harbour-side in Point Piper, then you're unlikely to have had any underhanded dealings channelled through our civil courts where you'll get a slap on the wrist and a fine. If you're Billy Gordon, cutting sugar cane or working in pubs in Far North Queensland, then you can exchange the fine for a prison sentence and the law's casual disinterest for hawkish vigilance.

    If we genuinely want a democracy where our political representatives reflect the diversity of our population, and if we genuinely want these representatives to have had life experiences broader than undertaking an Arts/Law degree at Sydney University, then we need to treat people like Gordon with more empathy. After all, his context is our context; it's a product of our shared history and we need those who have suffered its worst effects to help change it.
    What do you think?
    2353 questions the ethics of those politicians who use another's past indiscretions for political advantage and the final quotes from Alecia Simmonds raise issues about the 'type of person' we want in parliament. They are important issues. Please let us know where you stand.

    Next week, as a prelude to the Budget, Ken asks 'Are budgets worth the paper they're written on?'


    Instant Experts


    To be in public life you need to have a sense of self-belief. How else would you cope with those that feel they can criticise your actions, private life, as well as decisions you have made in the past?

    ‘Stars’ such as elite sports professionals, actors, performers and so on can demonstrate that they excel in their field of endeavour. While you personally may not like how people like Michael Clarke or David Bowie perform their job, there are plenty of people that do — and they are entitled to their opinion. ‘Stars’ also usually keep their public pronouncements to areas where they have demonstrated expertise and considerable knowledge. If you don’t like the field of endeavour or the person, the public opinion of the ‘star’ is usually ignored and the world moves on.

    It’s not the same for politicians. Politicians have a large influence over our everyday lives. On a recent Saturday morning, the Brisbane Times was reporting a newly elected Queensland parliamentarian whose former partner claimed she suffered domestic violence; leading to the premier referring him to the Police for investigation. He is also claimed to have structured his affairs to avoid his obligations in respect to child support. There was also a discussion on the number of federal politicians with more than one mortgage — the implication being that they may allow personal considerations to be a factor in any discussion or vote on the future of negative gearing in Australia. Neither of these issues would be ‘newsworthy’ if the subjects were the staff at the local supermarket.

    Ask a politician why they went into politics and few of them would say it’s for the money or to gain fame. Until fairly recently they generally saw a need for something to be done in their community and decided that they were the ‘somebody’ that should do it. In recent years we are seeing the career politician emerging where they join the young [insert party here] club at university while doing a degree, then move on to the senior party and usually take a position in an existing politician’s office, or in the party hierarchy, before ‘blooding’ themselves in an ‘unwinnable’ seat then later being offered a winnable seat as a reward.

    Once a person gains a parliamentary seat, they (depending on skills and popularity) may be offered a ministry. The person who can gain the most support then becomes the leader. While the system has worked for a century in Australia (and longer in the UK) with reasonable success — as evidenced by Robert Menzies, a lawyer, and Ben Chifley, a train driver, becoming prime ministers in the 1940’s — there seems to be a pattern for recent ministers to not understand the issue at hand. The Australian government’s website explains the role of a minister as a member of the legislature who has been chosen to also work as part of the executive, usually with responsibility for matters on a specific topic (his/her portfolio). It is a similar practice in the UK and other ‘Westminster’ parliaments such as in Canada and New Zealand. The website also notes that there is no mention of political parties, ministers or the roles of prime minister and opposition leader in Australia’s constitution.

    In contrast, the United States of America has a different system whereby the president selects people they believe will perform well in the ‘secretary’ roles — which are similar to the ‘minister’ roles in Westminster parliaments. The person selected usually has some involvement in the industry he or she will regulate. The president can choose anyone he likes to be a ‘secretary’ but the US congress holds ‘confirmation hearings’ to endorse the decision. As party politics are involved in the selection and confirmation process, the confirmation process isn’t always smooth — as discussed here in respect to former Defence Secretary Chuck Hagel. Hagel lasted two years as secretary of defence: his resignation cited differences of opinion with the Obama administration.

    In the ‘good old days’, while politicians nominally ran the various sections of the government in the Westminster system, they relied on the ‘frank and fearless’ advice of the permanent public servants provided to their (let’s face it) temporary leaders. The New South Wales Public Service Commission (PSC) discusses the concept here, while acknowledging that at times the action is fraught with danger. The guide includes the following cautions:

    One approach (recommended by Stephen M. Goldman (2008) in “Temptations in the Office: Ethical Choices and Legal Obligations”) is to prepare yourself carefully before you give the advice by:
    • Digging into the facts. Seek out a complete account of the situation, including facts and acknowledgement of biases
    • Gauging similarities with past situations. Recognise any significant particulars between the current problem situation and past situations
    • Analysing your decision-making process. Don’t over-estimate or under-estimate your instincts or your rational analyses. Use them as “checks and balances” against each other. Propose options. Suggest a number of practical alternatives, both short-term and long-term, that could be taken to meet the Minister’s or manager’s objectives.
    The NSW PSC also has advice for managers/ministers that are being told something they really don’t want to hear:

    Your style of communication may not be compatible with the communication style of the person who is giving you difficult or distressing information. However, as a professional, it is your duty to get the information they are attempting to communicate even if you consider the way they are communicating is annoying or distracting. This is particularly important when people are giving you criticism or unwelcome advice, because if you become angry or defensive you may cause that individual to stop communicating with you, and more broadly, you may develop a personal reputation, a culture and work practices that will result in you becoming isolated, uniformed and ineffective.

    It must have seemed to be a good idea for federal Treasurer Joe Hockey to appear on Q&A to discuss the release of his ‘Intergenerational Report’ during March 2015. Sadly for Hockey, it wasn’t. Hockey was shown to be out of touch on the economics of current ‘hot button’ issues such as negative gearing and infrastructure spending by John Daley, CEO of the Grattan Institute. As Hockey raised the usual talking points that had no doubt been tested by focus groups of party faithful and fed to him by senior advisors vetted by the prime minister’s chief of staff he was, as reported in Fairfax media, outclassed by someone who knew what he was talking about.

    Education Minister Christopher Pyne was probably expecting a relatively friendly interrogation from David Speers on Sky (given the reputation of the broadcaster), however it didn’t happen. Pyne also forgot the adage that if in doubt say nothing, as his claim that he is ‘the fixer’ has come back to haunt him on a number of occasions since.

    Prime Minister Abbott is not immune to criticism here either. Abbott claimed at a press conference that he had no concerns about metadata when he was a reporter in the 1980s. At best, Abbott was badly informed when he claimed to a group of journalists (the usual job description includes the ability to research quickly and accurately) that he wasn’t concerned by something that didn’t exist.

    Prior to entering politics, Hockey was a banking and finance lawyer as well as a policy director for the New South Wales premier. Pyne also was a lawyer prior to being elected to parliament at the age of 25 and Abbott has various qualifications in economics and arts and, prior to being elected to parliament, was a journalist, concrete plant manager and director for an anti-republic organisation. While they have had varying experience prior to politics, and all have tertiary qualifications, it is unrealistic to expect that they become instant experts on all the matters in their portfolio.

    As we discussed earlier, Menzies and Chifley were considered good prime ministers, but they also certainly didn’t have the personal experience to be instant experts in all the detail needed for a government to function — especially in wartime. The difference between the 1940s and 2010s is a permanent public service not afraid to give ‘frank and fearless’ advice, because in the 1940s the public servant delivering the dissenting view was a permanent employee and wasn’t neutered by the fear of their contract not being renewed. The public servant also was a long term employee — not someone appointed by the government of the day — nor did they have to deal with the ‘Minister’s personal staff’ (who have been ‘approved’ by the party hierarchy) disagreeing with them.

    Not that the US system is any better. While the ‘secretaries’ are usually chosen because they have some direct experience in the area covered by their portfolio (unlike Australia), there is considerable opportunity through the selection and confirmation process for ‘the best person for the job’ to be ruled out due to some previous alleged misdeed or political belief.

    Australia is also subject to political ‘ethnic cleansing’ of ‘permanent’ heads of departments, as witnessed in Victoria and Queensland following the recent changes of government. A master of the art was former Prime Minister Howard, who effectively sacked six ‘permanent heads’ soon after his election because of their perceived closeness to the former Hawke/Keating ALP government.

    So Australia has the worst of both worlds. Not only do our ministers generally have no direct experience in the portfolio they control, the higher echelons of the public service are on employment arrangements that can be legally broken by either side should they feel the need. Could it be possible that the ‘need’ could be giving ‘frank and fearless’ advice to their minister?

    The Political Sword has discussed the marketing and media management of politicians on a number of occasions. Is the ultimate expression of the failure of Australia’s current political system demonstrated by ministers clearly not being across the details of their portfolio? Is this because the political minders only give the minister the message or theme of the day rather than the information they need when someone goes ‘off script’?

    The Westminster system of government clearly has the potential to deliver better solutions to the problems faced by the citizens of the country concerned, as the minister takes advice from experts in the particular field, employed by the government on a permanent basis and thinking with a ‘long term’ view. The experts know that they have the right and obligation to present dissenting options to the minister if needed and discuss the possible detrimental effects of the possible decision — which the minister subsequently makes with all the information at hand. The opinion given should not have any effect on the continued employment of the public service officer. The US system has flaws when the ‘confirmation’ process for the various (probably partisan) senior staff and advisers to the President can take some time or be declined for potentially some party political objective.

    The problem is when the politics overrules good government. Those that operate successful businesses look for the best and brightest to manage the business elements the owners don’t understand — such as small business operators timetabling regular meetings with accountants and lawyers to assess the current situation and future plans. The current government maintains that Australia should be run like a business; and then buries the people that could provide the best advice under a layer of political appointees. The result is that ministers open their collective mouths to change feet as demonstrated above and policy is decided on party priorities rather than national priorities.

    The scandal in all of this is that both sides are equally culpable; we’re paying for it now and will continue to in the future as less than optimal policy will be implemented.

    What do you think?

    About 2353

    After reading 2353’s post, what do you think? Perhaps we can’t expect our politicians to be instant experts but are we, as a nation, allowing politics, instead of what is in the national interest, to rule our policy? Should the public service be encouraged to return to ‘frank and fearless’ advice? Is there another way?

    Next week Ken suggests that the Abbott government may not be as shambolic as it appears in his piece: ‘Beware, there is a plan’.



    The ‘trickle-down’ effect


    Next time a conservative politician or acquaintance tells you that tax cuts for the better off will help the state or nation’s economy, you might want to have ‘the discussion’.

    Tax cuts for the better off is part of a theory of economics known as ‘trickle-down’ that seeks to prove that if the tax cuts are given to the better off, they will spend more, increasing the demand for goods and services to the direct benefit of the economy as well as the government’s tax revenue. So we’re all on the same page — here is a ‘trickle-down theory’ definition:

    An economic idea which states that decreasing marginal and capital gains tax rates — especially for corporations, investors and entrepreneurs — can stimulate production in the overall economy. According to trickle-down theory proponents, this stimulus leads to economic growth and wealth creation that benefits everyone, not just those who pay the lower tax rates.

    Probably the best known example of this theory around the world has been the Reagan Presidency in the United States. In the early 1980’s, he cut the top tax rate by 20%! Most conservative governments have also implemented similar cuts in the past although, to be fair, not of the same magnitude. Conservatives will also tell you that government spending should be reduced to an absolute minimum and the government’s budget should balance. Forbes (an American business publication) as recently as 2013 has been arguing that while it finds the term ‘trickle-down theory’ objectionable, it is a valid theory that has worked in the past. According to the article, the term was coined —

    … by Democrats in the 1980s as a way to attack President Reagan’s economic policy combination of tax rate cuts and some relaxation of federal regulations. They needed a catchy, easy-to-remember zinger to fire at Reagan; a line that would keep their voting base angry.

    The article goes through all the usual conservative talking points: small government is less of a drag on the economy; people need work rather than infrastructure such as schools and transportation; the better off are the ones that create wealth; that Obama is to blame and so on. It finishes with this:

    What poor people should want is more freedom and more growth, so they will have better opportunities. The deceptive “trickle-down economics” notion was crafted to take advantage of their ignorance about the way the world works. Perhaps one day the pitiable Americans who now cheer when politicians who masquerade as their friends denounce “trickle-down economics” will realize that the massive federal Leviathan is their enemy.

    While I take the point that the term ‘trickle-down theory’ may have been coined by a member of the Democratic Party in the US and it does have more ‘zing’ than ‘supply-side economics’, the fact is that the theory is all about those who are better off supporting the economy and the government reducing its influence. The conservatives have their own ‘zinger’ name for the theory as well — ‘Reaganomics’. Regardless of the name you want to give it, the theory suggests that benefits of tax cuts to the better off are supposed to flow to those that are less well off. If that isn’t trickling down, what is?

    The other argument is that the reduction in regulation assisted Americans to find jobs — and contribute to the economy. While to an extend it did, the majority of the Reagan era was during a time in the world’s economic history when the economy was chugging along nicely thank you very much. It could also be argued that the seeds for the current social and economic woes in the USA were sown in that era where personal wealth was a far greater concern than the common good.

    Seems it’s all cut and dried then, doesn’t it? US and Australian conservatives still call for a return to ‘supply-side’ or ‘trickle-down’ economics (depending on your point of view), citing amongst other justifications, Reagan’s success in 1981 in reversing the US recession.

    Reagan’s tax cuts are claimed to be the event that ended the recession of the late 1970’s and early 1980’s in the USA. But what is (conveniently) forgotten is that he increased government spending by 2.5% at the same time. Government spending also stimulates the economy. Therefore the most cited example of the benefits of this economic theory doesn’t stack up, as there were other influences at the time. Despite later increasing taxes for the better off, Regan also tripled the US Federal deficit from 1981 to 1989 — hardly the action of a government reducing influence in the economy. George Bush (the elder) also increased taxes despite a ‘no tax increases’ promise.

    Recently the Huffington Post reported on the success on the Governor of the US state of Minnesota (Mark Dayton) and his remarkable turnaround of the state’s economy. The full article is here and the highlights are that when he took office in 2011, he inherited a deficit of US$6.2 billion and 7% unemployment. In 2015, Governor Dayton handed down a budget surplus of $1 billion that he has pledged to spend on transportation and education. Unlike nations, US (and Australian) states do not issue their own currency, so balanced budgets are considerably more important than at the federal level.

    Dayton is an interesting person. He has been in politics for some time but considered to be a terrible ‘retail’ politician. According to Mother Jones:

    An heir to the Target retail fortune, Dayton, 68, has ploughed tens of millions of his own money into his campaigns, but it still hasn't come easy. He swallows his words in a rush, speaking in almost-unintelligible mumbles and frequently losing track of his point as he rambles on unrelated tangents. "He's not a terribly articulate guy," says Larry Jacobs, chair of the University of Minnesota's public policy school. "He's not a smooth talker; he struggles to give a smooth public speech." At public events, Dayton hunches his shoulders, which makes him appear shorter than his 5-foot-10 frame, and often appears to be trying to disappear into the crowd. No one wonders whether he'll seek national office someday. He's not the leader of the free world — he's your dad, struggling to make small talk with you and your friends after you get home from school.

    So how did Dayton do it? Well you could say he threw the ‘supply-side theory’ out the window. Not only did he raise taxes on the highest earners in Minnesota; he increased the basic wage in the state to $9.50 an hour. Mother Jones reports:

    Republicans went berserk, warning that businesses would flee the state and take jobs with them.

    The disaster Dayton's GOP rivals predicted never happened. Two years after the tax hike, Minnesota's economy is booming. The state added 172,000 jobs during Dayton's first four years in office. Its 3.6 percent unemployment rate is among the lowest in the country (Wisconsin's is 5.2 percent), and the Twin Cities have the lowest unemployment rate of any major metropolitan area. Under Dayton, Minnesota has consistently been in the top tier of states for GDP growth. Median incomes are $8,000 higher than the national average. In 2014, Minnesota led the nation in economic confidence, according to Gallup.

    Scott Walker is the Republican Governor of Wisconsin — the neighbouring state to Minnesota — and a potential Republican Presidential Nominee in 2016. For decades, the two states have been comparable in a number of social and economic criteria. In the past few years, it seems that the ‘unlikely politician’ in Minnesota is outperforming his counterpart in Wisconsin according to a number of sources including Minnesota Public Radio and Econbrowser. Walker was also the subject of a ‘recall election’ in 2012, when in excess of 500,000 Wisconsin voters petitioned for Walker’s removal from office. He won the subsequent re-election — only after allegedly receiving considerable financial support from outside the state. CBS News in the US is reporting there are some potential problems with the morals and ethics of how Scott Walker manages his fundraising. Never the less, Walker is seen as a conservative hero by legislating to remove considerable negotiating power from the public service unions in Wisconsin and other US states as detailed in this article from The New York Times . Walker is now claiming that his ‘success’ with unions gives him the experience to deal with Islamic State (when he becomes a Republican President in 2016 you would have to assume). Fighting with unions and reducing public services are not unknown in Australia under the current federal government or its predecessors. Dayton has announced that his current term will be his last — and yes, he did have to wait until the ‘stars aligned’ to actually perform what is considered to be a remarkable recovery.

    Australia’s newly appointed (in January 2015) Treasury Secretary, John Fraser, has gone ‘on the record’ claiming that ‘Reaganomics’ had some positive effects. Gareth Hutchens, writing for Fairfax media (link above) suggests that the view of Fraser is somewhat different to Martin Parkinson and Ken Henry — the previous two Treasury Secretaries. Given that Parkinson and Henry demonstrated their credentials during the Global Financial Crisis and its aftermath, Fraser has some large shoes to fill.

    It is fair to suggest that there will be economists discussing the benefits of ‘trickle-down economics’ for years to come. However, Governor Dayton has clearly demonstrated that trying to make society more equitable by increasing the basic wage and taxing those that can afford to fund the services will not only improve the state’s bottom line, it will improve the quality of life enjoyed by all its citizens, then when the ‘payoff’ comes, services such as education and transportation can be improved using government funding. It seems there is a better way than the frequent calls for ‘tax cuts for the well-off’.

    Minnesota and Wisconsin have seemingly been joined at the hip economically and socially for a considerable period of time. Governor Dayton has improved the living conditions of those in his state, reduced unemployment and is now funding improvements to transportation and education using methods that are certainly not supported by Australia’s Treasury Secretary Fraser or Treasurer Hockey. Governor Walker cannot replicate the success of Dayton (or Reagan for that matter) using ‘traditional’ conservative economic measures in neighbouring Wisconsin; accordingly the citizens of that state are falling behind their ‘long time equals’ who live over the border in Minnesota.

    So next time you hear the call for tax cuts, austerity and ‘small government’; why don’t you think about Minnesota’s Mark Dayton and have ‘the discussion’ about a better way instead?

    What do you think?

    About 2353

    Welcome to ‘the discussion’ we have to have. 2353 provides plenty to discuss in this piece on ‘trickle-down’ economics and the alternative approach — that seems to be more successful. The piece is particularly timely as Hockey released the government’s taxation discussion paper last Monday.

    Next week, on a similar theme, Ken discusses ‘How the economic rationalists tried to steal our hearts and minds’, which looks at how the economic rationalist approach was trying to change not just our economy but our basic Australian values.



    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.



    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.