Category Archives: Politics – Australian

Politics post-Qld

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These are the results I did today on a quiz designed to determine which side I am on so far as politics in the United States are concerned. My results were not much of a surprise to me:

Republicans                  98%
Conservatives               96%
Constitution Party        91%
Libertarian                      69%
Democrats                        5%
Socialists                          1%
Green Party                      1%

Feel free to try it yourself at I Side With . . . . But I mention it only as a preamble to my thoughts post-Queensland.

Tony Abbott is the rawest rookie ever to lead a major political party in Australia. There is something so off about his approach to the use of power to achieve political ends that it is positively maddening. Did he really enter politics so that he could choose the winner of Australian Literary Awards and bring knighthoods back. Prince Phillip is a disaster of such stupidity that I am astounded that it had even crossed his mind, never mind that he actually decided to surprise everyone, including his own party. He undoubtedly made the fatal difference in Queensland which endlessly depresses me. It is very possible that this was the fatal mistake and he will end up being assassinated in the rotunda, or however these things are now done amongst the Libs in Canberra. Yet what truly irritates me is that there is no one else I would prefer so far as policy goes. He may no longer be capable of winning the coming election, and if so he will therefore have to go. But no one amongst the leadership group represents the policy matrix I prefer.

I think the junking of his Paid Maternity Leave scheme means either he has seen the light, or more likely, he has had a midnight visit with baseball bats to encourage him “to consult” more closely with the rest. Rudd could never be brought round, but Tony might just make the adjustment, and he has a year or so to get there (or perhaps about three months). The thing about Rudd, however, was that while his colleagues hated him, the country found him quirky but OK. With Abbott, it’s something like the reverse.

The nature of this country is at a crossroads. A Shorten-Plibersek Government would add to the bile, and with the 47% now a universal and climbing, this could be the last Coalition Government for a very long time. And as it happens, today I was down on Acland Street and who should be sitting at the cafe next door but Bill Shorten himself along with his family. What was also quite striking, and why this is still the country it is, was that no one invaded his privacy by coming up to speak to him, nor did there seem to be any security presence anywhere around. And then, half an hour later, I came across him again, at the bookshop looking through a book. My wife thinks it was just a cynical meet-the-people exhibition. I just think he was out to have a quiet Sunday afternoon in just the same way I was having myself.

There is so much going for this country, I just don’t want to see it ruined.

Leading the Boxer Rebellion

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From out of nowhere there was a column on the editorial page of The Australian on Friday by Angus Taylor of whom I had never heard, but for whom I now have great expectations. He is the Liberal Member for Hume. The headline is a bit misleading – Andrew Leigh shows little is left of Labor’s Hawke-Keating legacy – but how often do you see such sense leap off the page. Yes, the aim of the article was to refute the leftist nonsense that had been trotted out by Andrew Leigh in an article the day before, but there are ways to think about these things of which some are better and others are worse. This was in the category of much better. This is what I especially liked:

New Labor’s central economic assumption is that you can cut the pie differently and it won’t shrink. Tax productive businesses, tax hardworking people, crowd out private sector spending and middle Australia will keep working just as hard and as smart. Like Boxer in George Orwell’s Animal Farm, the aspirational middle class is too busy to realise what is happening to it. Boxer finished up at the knackery. This is lunacy. The economy is not a draught horse that keeps working regardless of the weight saddled on it.

Australia’s long-term prosperity, characterised by high real wages and low inequality, has come from rewarding great people and great businesses, not taking the rewards of hard work and squandering them on harebrained schemes — pink bats, cash for clunkers, school halls and cash handouts to the deceased.

Our success as a nation has come from rewarding clever investment, innovation and ideas. We have sustained high real wages throughout our history by encouraging growth and avoiding a flood of unskilled immigrants which fuels rampant inequality. This is in stark contrast to the US with its early history of slavery and its more recent influx of Hispanic immigrants.

It also says that Angus Taylor “was a partner at McKinsey and Port Jackson Partners and studied postgraduate economics at Oxford as a Rhodes scholar”. Let me tell you, it shows. So let me add just this to add to what he wrote.

One of the keys to following economic events is to separate out the stocks from the flows. We have a massive capital structure (a stock of assets) to which we add a small increment each year (the flow of newly produced goods and services, badly measured by GDP). It’s not spending that makes an economy richer, but first how much capital you already have and then, second, what you end up spending on. The problem at the heart of pink bats, cash for clunkers, school halls and cash handouts to the deceased – and please don’t forget the NBN and the billions blown on green energy – is that you draw down on your capital but, unlike with genuine value adding activity, do not replace what you have used up. Once you make the question whether some expenditure is value adding, that is, whether it will add more to the economy than it uses up, a great deal of clarity is added to the policy process. Welfare draws down with no intention of replacement which is fine if you can afford it; capital outlays are needed to maintain our ability to provide that welfare along with allowing each one of us to make our own individual way in the world.

The PM discusses IR reform

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There is a difference between fixing our industrial relations problems and merely throwing out the system we have had since just after Federation. The first most assuredly must be done, but is not the same as the second. Let me quote the Prime Minister, who was trying to get people to understand the difference. The story from The Australian is headed, Abbott defends Fair Work Commission’s ability to set penalty rates. He does not deny that they are too high, only that there is a mechanism for adjusting penalty rates to a rate that will allow employment to grow. From The Oz:

TONY Abbott says he will defend the Fair Work Commission’s ability to set penalty rates, as Joe Hockey called on Labor to “stop scaring people” over industrial relations. . . .

Mr Abbott, speaking in Colac, southwest Victoria, set out a “statement of principle” that industrial relations reforms should aim to achieve “more jobs and better paid workers”.

“If the Australian workforce earns more and is as productive as possible that’s going to be good for everyone. Good for jobs, good for families, good for business, good for prosperity, and that’s what I want to see,” he said.

“In terms of penalty rates, we have a very well-established system in this country — it … began back in about 1903, as I recollect — and under our system it’s the Fair Work Commission which sets these rates, that’s how it is, that’s how it was, that’s how it will be.”

I think giving HRH an Australian knighthood was a distraction and made the government an easy target for its enemies. But this is not why I would or wouldn’t vote for some government. But knowing that the only way to fix our industrial relations problems is to go through our established system of labour relations is what needs a more clear-headed understanding by everyone on this side of the fence. On this, he had the vocal support of the Treasurer so we can see that the PM was speaking for the entire government.

On a related note: what does John Howard have in common with Sir Stanley Bruce? The answer to that might help you clear your head.

Most people don’t like hard decisions

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This is the story from today’s Australian, Queensland election 2015: ‘some people don’t like hard decisions’.

QUEENSLAND Premier Campbell Newman has put his party’s dramatic fall in the polls to “hard decisions” he made that “some people didn’t like”.

The Liberal National Party (LNP) annihilated Labor in the state election three years ago, scooping 78 seats in the 89 seat parliament.

The opposition was left with just seven seats, but polls suggest the LNP and Labor are now neck and neck.

This is how politics seems to work. There is one side who wrecks things and the other side who tries to put them back together. Think of the following pairings: Whitlam-Fraser; Keating-Howard; R-G-R-Abbott. But because the wreckers had their heart in the right place, and will almost never be attacked by the media, we keep going. The interesting part of the latest is that Shorten has misunderstood his own part in the process, and is stopping the Coalition from repairing what everyone agrees is broken (see W. Swan). If Labor wins at the next election, it will be just in time to have to deal with all of the worst fiscal horrors left behind by R-G-R, and they will no longer stop the boats.

I don’t think it is the case that people don’t like hard decisions, but they certainly don’t like not having things explained to them in ways that bring to the surface the nature of our emergency. When you have a PM who thinks he needs to leave his imprint on knighthoods and our literary awards, and leaves economic policy for others to sort out, you have a problem, with the even bigger problem to come, that the spending party may return to government before the party of restraint has actually fixed things up.

As odd as it may sound, Australia has the best industrial relations system in the world

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I have an article at The Drum, Industrial reform: ignore fairness at your peril. There are many political traps for a right-of-centre government in trying to improve the operation of our industrial relations system, but the most dangerous is thinking that the most important reform is the removal of the role of our system of industrial tribunals. This was the central point in my article:

All too often, the core issue about industrial relations reform is not about outcomes, but about the structure of the system itself. Australia has developed its own unique and largely successful system of tribunals that has been the perennial target for elimination by economists since it was first formed.

And so it worries me that we are there once again. This is the basic outline of what is being investigated according to the Productivity Commission website:

In undertaking this inquiry, the Commission has been asked to review the impact of the workplace relations framework… [my emphasis]

If the continuation of industrial tribunals were off the PC agenda, and instead the issue was how our existing industrial relations system could be made to function for the better, I would be much more confident that the PC inquiry might come up with something of genuine value.

So my prime recommendation to the PC is this. If you start from the premise that industrial tribunals are here to stay, there is a possibility that the inquiry might do some serious good. But if that is not your premise, I would expect little good to come from this inquiry.

I, of course, go much farther. I think that industrial tribunals are a positive benefit to the smooth operation of this economy. I don’t think trying to remove them would be bad only because the politics are wrong. I think they should be left alone because the economic consequences of trying to remove them would be so damaging.

In the UK, The Times required Fortress Wapping to introduce new technology. At The Australian, it was IR as usual and a relatively smooth transition. Recognising the nature of the difference will help you understand how important our industrial relations system is to our economic prosperity.

Plain speaking on IR reform

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It’s opaque, not all that clearly stated, somewhat roundabout in getting to its point, written mostly in tongues in the form of an analogy, 100% ironic in its tone, but if you ask me, Grace Collier’s opinion piece in The Australian today – Fair work lessons in the real world – was written in defence our current industrial relations system. It describes a projected guided tour to the land of free enterprise with specific focus on its industrial relations system. And while it is hard to find a straight out quotable quote, let me mention just this one [bad language alert!]:

I am delighted to announce my “Harden the ­F–k Up Industrial Relations Discovery Luxury Extravaganza” to the industrial relations leader (and top shopping destination) of the world, the United States of America. This tour, in March, is aimed at the high-end traveller who thinks the main reason for Australia’s productivity and union problems is the Fair Work Act. It should be noted — and this limits the target market somewhat — the tour is strictly “no grumps allowed”.

There are then a series of vignettes about various aspects of the American IR system, with this the last one which is her grand finale:

Since 1973, union officials have enjoyed exemption from the Hobbs Act, a law that makes obstruction of commerce by robbery or extortion a crime. Union officials can use union violence free from criminal prosecution provided they are seeking to advance “legitimate union objectives.” Union violence is reportedly, since this time, responsible for at least 203 deaths, 5689 incidents of personal injury, more than 6435 incidents of vandalism and tens of millions of dollars in property damage.

The point she is making, but written in code so as not to upset her readers at The Oz who, she suspects, are unanimous in their desire to rip the present system down, is that we have a pretty good industrial relations system already, and we would be mad to try to put in place something like the system they have in the United States. That is exactly so. With every other national government literally the political wing of the union movement, we would be mad to pull down the one piece of social machinery we have designed to contain union power. It’s not perfect, and it can be made better, but there are a lot that are far far worse.

MORE ON THE AMERICAN INDUSTRIAL RELATIONS SYSTEM: It’s titled, “Superman Joins a Union” which gives you some idea about labour relations in Metropolis. At least if he were here he might be able to take his case to an industrial tribunal. The union official you see here is a universal type, known to one and all. It’s funny, but it’s no joke.

Isn’t this a good news story?

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The way this started, you would have thought that the Government was slipping this in under the cover of Christmas so that no one would notice. From The Age naturally:

Environment Minister Greg Hunt has quietly published data, just two days before Christmas, showing the second year of operation of Australia’s carbon price was more successful at reducing emissions than the first.

New data from Australia’s National Greenhouse Gas Inventory show emissions declined across Australia by 1.4 per cent over the 12 months to June.

That compares to a decline in emissions of 0.8 per cent for the previous 12 months.

The carbon price was introduced by the Gillard government and began operation on July 1, 2012. It ended on July 1, this year after the Abbott government fulfilled an election pledge by abolishing it.

The sneaky dogs, not telling us how wonderfully it was all working. Tim Blair, however, brings it all into the light, under the cryptic heading The Joy of Pointlessness:

According to the National Greenhouse Gas Inventory, Labor’s carbon tax reduced carbon emissions by 0.8 per cent during its first year and by 1.4 per cent during its second year. In other words, it cut Australia’s 1.3 per cent global carbon dioxide contribution by next to nothing.

And the cost of this minimal reduction? $7.6 billion. Labor’s Andrew Leigh evidently believes this was money well spent, and is upset that carbon generation has now returned to the same level it was in August 2013.

Nevertheless, it is astonishing that the Government did hide the announcement in this way. Either most of the country sees the pointlessness, which should mean it deserves a larger run, or it doesn’t, in which case we will return relatively soon to this exercise in poverty creation.

The Israeli experience in Sydney

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If you go into a cafe in Israel, it’s not quite like trying to board a plane but it’s not just a walk in and sit down experience either. This is, so far, a one-off. And while the man at the centre may be a nutter in some sense, he is not off the planet, but a rational actor fully responsible for what he did and fully aware that the rest of us would judge him very badly for what he has done. Criminally insane he was not. How many more like him there are only the future can tell.

We need a Parliament Act of our own

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Let us take it as read that the Government has to get its budget in order, not because it is good for the Government, but because it is good for the country.

The level of public outlays is too large and the revenue base, as large as it is, is still too low to cover all expenditure. If we don’t fix it, as everyone knows, Australia will have a diminished future. All this is agreed by everyone (see W. Swan for confirmation).

So the Government brought down a budget that was designed to limit public spending and allow some fiscal repair. Since everyone might have gone about it in a different way, let us again state for the record that the one particular way chosen by the Treasurer is different from the one each of us might have chosen ourselves. But that is mere detail. It is the Government and it was elected to find a way to get these things right.

But we are blessed with the Senate from Hell. A series of people of such comprehensive economic ignorance matched with a bizarrely wilful malevolence will allow nothing through. And it will ruin us, let there be no doubt about that. Not fixing the budget will leave just about everyone less well off. The economy will shrink and take us down with it.

Since we are in the mood for constitutional amendments, let’s at least do something useful. What we need is a constitutional amendment that will prevent the Senate from rejecting money bills. Here is the story from the UK:

The Parliament Act 1911 is an Act of the Parliament of the United Kingdom. It is constitutionally important and partly governs the relationship between the House of Commons and the House of Lords which make up the Houses of Parliament. This Act must be construed as one with the Parliament Act 1949. The two Acts may be cited together as the Parliament Acts 1911 and 1949.[1]

Following the rejection of the 1909 budget, the House of Commons sought to establish its formal dominance over the House of Lords, who had broken convention in opposing the Bill. The budget was eventually passed by the Lords after the Commons’ democratic mandate was confirmed by holding elections in January 1910. The following Parliament Act, which looked to prevent a recurrence of the budget problems, was also widely opposed in the Lords and cross-party discussion failed, particularly because of the proposed Act’s applicability to passing an Irish home rule bill. After a second general election in December, the Act was passed with the support of the monarch, George V, who threatened to create sufficient Liberal peers to overcome the present Conservative majority.

The Act effectively removed the right of the Lords to veto money bills completely, and replaced a right of veto over other public bills with a maximum delay of two years.

The Senate is our House of Lords, although the name could not be more inappropriate given many of the present incumbents. Its ability to interfere with the proper management of the country is unacceptable. It should become, like the Canadian Senate, a house of review and advice, but the government should be run from the House of Reps.

This is the constitutional amendment we need. The Senate represents little more than egocentric grandstanding. Let us keep the Senate, by all means, but let us restrict the damage it can do to good governance and sound management of the economy.

The Australian Democrats once held the balance in the Senate for many years based on its promise not to block supply. This should now become an obligation imposed on the Senate by the Constitution.

Connection lost

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Two pieces on the editorial page of The Oz this morning, both saying something. The first was from Oliver Hartwich, Tony Abbott should follow Kiwi path to reform. The Kiwi path to reform seems to consist of two useful ideas: work out a valid set of priorities and then create a political constituency that will back the changes required.

Key’s recipe for implementing reforms is simple. His government spends at least as much time on carefully preparing policy changes as it spends on their implementation.

Ah, but you must also know where you have to spend your political capital. What sorts of thing has John Key being pursuing?

Since Key became Prime Minister in 2008, New Zealand has reformed a number of areas. The top income tax rate was slashed to 33 per cent while GST rose to 15 per cent. The government part-privatised some state-owned companies, particularly in the energy sector. It has become more difficult to remain on welfare in New Zealand with stringent work expectations introduced for benefit recipients. Fiscal policy has been tight with the budget on track back to surplus.

Sounds good. Sure no Senate in NZ but at least I can see that they have kept their eye on the ball. Meanwhile, what does our PM spend his political capital on? Another change we have to make is the title of the article. Here is where he spends his political capital:

I seek constitutional recognition of Aboriginal people in a form that would complete our constitution rather than change it.

Such cheap sentimentality is barbarous, absolutely inane. There is not a person out here who actually thinks it would make a dime’s worth of benefit to Aboriginal welfare but there are plenty of reasons to believe it would do damage to our Constitutional order. If this is really why h wanted to be the PM, one way or another, he won’t be Prime Minister for very long.