The contradictions of the Abbott Government

In a new federal government which has mostly been a huge disappointment, Joe Hockey stands out as being closest in it to a rational politician. Too often, the government has tended to prioritize a “tea partiest” social reform agenda (driven mostly by Abbott himself), while often eschewing the urgently needed economic reform agenda, which has always been the hardest, and most important area to tackle in Federal politics.

Abbott seems ready to implement a baffling array of side issues, long being championed by the looney right in Australia, like the Institute of Public Affairs, who are well outside the main stream, but who nevertheless are listened to by the ideological, ultra conservative, mostly conservative Catholic, cabinet of Abbott. To list them all would take up more space than desired, but just consider these:

  1. apparently it is now “ok to be a bigot” (according to the chief Law Officer in the land George Brandis), no matter how this might offend others or diminish their space under the Australian sky;
  2. nobbling the ABC, with apparently the eventual intention of selling off, at least parts of it, to News Limited;
  3. bringing back the British honors system (what a joke!);
  4. insisting on implementing the most expensive paid parental leave scheme in the world (and most eschewed to the rich);
  5. refusing to consider a free vote on gay marriage; and
  6. dismantling a website developed by the Federal Department of Health to inform consumers of the the most fattening and least fattening foods and have that reflected in food labeling – a very effective way of tackling the obesity epidemic  and one fought tooth and nail by the fast and packaged food industries. The fact that this was traced back to the assistant Minister for Health’s senior staffer, who happened to be a former lobbyist for these said industries, did not concern Abbott one iota. It is difficult not to contrast the behavior of Barry O’Farrell and Abbott and his ministers. The Abbott Fedral Government seems to be more captive of vested interests than any in living memory – and it has not even been in office 12 months yet.

Joe Hockey, on the other hand,  has exhibited mature leadership in not pandering to the nay sayers in the face of closure of smoke-stack and un-economic industries like cars, alumina and uncompetitive manufacturing. He has tabled a visionary process to funnel Superannuation monies into new infrastructure builds by effectively bribing the states to sell off their mature infrastructure assets and then put the proceeds into new start-up programs in return for the Federal government providing 15% of their cost. Now 50% of Super Funds go offshore, because they do not want to invest in start up infrastructure projects, but are more than prepared to invest in mature assets with proven revenues.

This will revolutionize the way infrastructure is financed and built in this country, at a time when construction in the mining industry is winding down. A sensible, common sense, and economically rational way of tackling this problem.

 

What could Malcolm Turnbull’s Third Party look like?

With Julia Gillard’s collapse in the polls, without something extraordinary happening, it looks as though Tony Abbott will have a clear run to the Prime Ministership. Much of his own party, and the majority of the Australian people do not want this to happen, but in the absence of an acceptable alternative this is what will…

The only way to stop this, is for a third party to emerge, with a charismatic, smart and popular leader, a strong experienced team of technocratic politicians and party men and women behind him, and with it strong backing from the business and general community. Such a leader is Malcolm Turnbull.

With Abbott’s current strength, and the weakness in the Labor Party under Gillard, Turnbull’s ambition to seize the LCP leadership before the election has now evaporated. Many of us thought, that Turnbull was being a loyal party man in anticipation of Gillard gaining in the polls as we move towards the election (which is the historic trend for incumbent governments), and once parity was gained, then the LCP would panic, and turn to him. What other explanation could be proffered for such an intelligent man as Turnbull supporting the incoherent and illthought- out set of  utterances which pass for Abbott’s policies.

Since the ill-conceived Rudd Challenge, after which Gillard’s electoral support has evaporated, Turnbull has been subtly shifting his stance. He negotiated with the party a compromise on the NBN (although in policy terms it is quite ridiculous), and he now in the last week or so, is supporting a revival of the Republican debate. Both policy issues are directly against Abbott’s mantra, and particularly the Republican issue designed to directly challenge his authority (remembering Abbott was the leader of the Royalists in 1999), and he is extraordinarily reverential to both the British Crown and all things British. Turnbull is the opposite.

Could it be that Turnbull is testing the water on a third party, with him as leader.  If so, considering the unprecedented level of disillusionment with federal politics on both sides, and the unprecedented low level of popularity for both leaders of the major parties, isn’t it exactly the right time when a well positioned and led third part might succeed? Certainly, Turnbull has very considerable support with on both sides of politics, and the so called swinging voters.

Let’s for a moment consider what this party might look like. To be successful, it would require competent middle of the road politicians and ex politicians from both sides; it would require for highly skilled party machine men to commit to such a cause; and it would require considerable levels of support from business and community organisations to fund (although i suspect a copy of the Obama popular “man in the street” internet based funding model would be a real winner with lots of people).

So who might these politicians be who would commit to such a cause. Let me reel off some of the more obvious ones:

Lindsay Tanner

Geoff Gallop

Amanda Vanstone

Jeff Kennett

Kristine Keneally

Ted Baillieau

Nick Greiner

Anna Bligh

Penny Wong

Tanya Plibersek

Bob Carr

Jason Clare

Mark Dryfus

Kate Ellis

Tony Windsor

Andrew Wilkie

 

I’m sure there are many more which other bloggers could identify.

If this list is anything like accurate, then there is a party to be built in record time if it is to prevent Abbott from being PM, and surely that would be a service to all Australians, on all side of politics.

The NBN is too important to play politics with…..

You may have noticed in the Press the spat between Malcolm Turnbull and the ABC’s Technology correspondent Nick Ross. The source of this friction is that Ross has exposed the coalition’s broadband policy as the sham it is.
http://www.abc.net.au/technology/articles/2013/02/21/3695094.htm

In this article, he goes in to a huge amount of detail comparing what is currently planned and what the coalition says it wants. Frankly, Ross has nailed Turnbull well and truly and Turnbull does not like it one little bit.  I suggest this is because Turnbull knows he (Ross) is right (Turnbull is after all one of the country’s foremost technology executives, and would understand the technology arguments very well), and he has been exposed as being a hypocrite on these issues. We all know Turnbull has gone along with Abbott’s recidivist policies presumably waiting for him to self-implode in the hope that LCP party room will turn to him, but this policy stance he is advocating is frankly irresponsible.

For any of you in doubt about this, look at my previous blog on this where CSIRO sets outs in dispassionate, objective fashion how important an advanced broadband capability will be for the future economic well-being of Australia, particularly in the light of our appalling non farming/mining productivity performance.

Those of you who read this blog regularly, will realise I am generally a fan of Malcolm Turnbull. In fact I think he is the best person to lead this country into the future. But he is dead, dead wrong on this. One of the things I admire about him is his willingness to analyse things on their merits and not get too tied up in Abbott’s high ideological approach to policy. Does this prove me wrong? I very much hope not. We can only hope that when they come to power, they will quietly shelve this stupid policy.

Further to the North Korea discussion…..

An interesting additional dimension to my entry earlier in the week on North Korea  appeared in “The Age” this morning (Saturday 9/3/2013) It states:

Missile Shield Spurs China’s Korea Stance

BY JOHN GARNAUT CHINA CORRESPONDENT BEIJING

CHINA’S support for tougher sanctions against North Korea has been prompted in part by concerns of an evolving USanchored missile defence system on its borders, say Chinese and Western analysts. The missile defence systems involve new land and sea-based radar systems, missile interceptors and intelligence sharing between the US and its regional allies aimed at shooting downa North Korean missile during the relatively lowvelocity launch phase. Analysts note that these systems could also be used to shoot down missiles launched from China’s eastern regions.

 Australia is building three air warfare destroyers with Aegis radar and missile control systems that can be potentially integrated into the US system. ‘‘ North Korea’s test of a nuclear warhead and missile may not bring much of a [direct] threat to China,’’ said Cai Jian, a North Korea expert at Shanghai’s Fudan University. ‘‘ But the response from Japan or South Korea, or America’s strategic advances into the region, are more disadvantageous to China. These are the reasons China opposes North Korea’s tests.’’

 The sanctions against last month’s nuclear test by North Korea were jointly drafted by China and the US and endorsed by the UN Security Council on Thursday night. They will make it more difficult for Pyongyang to shift money and technology in aid of its nuclear program.‘‘ These sanctions will bite and bite hard,’’ said Susan Rice, the US ambassador to the UN. The UN resolution follows Pyongyang’s successful ballistic missile test in December, as well as a stream of bellicose invective. Prior to the agreement, Pyongyang threatened to turn South Korea into ‘‘ a sea of flames’’ .

 Responding to the resolution, Kim Jong-un’s regime said on Friday it was nullifying all agreements of non-aggression and denuclearisation with South Korea and was cutting off the North-South hotline. Officials in Seoul said they were on the alert for any possible attack as Pyongyang seeks to vent its anger. ‘ The higher decibel of invective isa bit worrisome,’’ said Bill Richardson, the former governor of New Mexico, who has travelled to North Korea eight times, most recently in January. ‘‘ It’s the highest negative level I’ve ever seen, and it probably means that the hardline elements, particularly the military and not the Foreign Ministry, are in control.’’ On the other hand, Mr Richardson said, ‘‘ China is part of asignificant sanctions effort, and this may cool the North Koreans down, may temper their response.’’

 Several analysts said the effectiveness of the sanctions would depend on China adopting a far greater level of enforcement than it had previously. Regional missile defence systems are evolving in response to North Korea’s weapons program and also to increasing concerns about China’s military intentions. ‘ It allows Japan to say, ‘We’re buildinga missile defence system against North Korea but we can also use it to defend ourselves against China,’’’ said Scott Harold, a security expert with the Rand Corporation in Hong Kong. Dr Harold said the US had been strongly encouraging South Korea and Japan to engage in defence cooperation . ‘‘ Beijing is worried that this is a prelude toa trilateral alliance or a Pacific version of NATO.’’

 Those defence systems may, in turn, prompt China to build more missiles  ‘ The overall direction in which missile defence is going means the US, Japan, probably South Korea and Australia, get used to and work on the basis of integrating their systems ,’’ said Stephan Fruehling, an expert on missile defence systems at the Australian National University’s Strategic and Defence Studies Centre.

 ‘ This has political implications and symbolism, and that is what is causing China grief,’’ he said.

 Sam Roggeveen, editor of the Lowy Institute’s The Interpreter website, said there was a risk of a regional ballistic missile defence race: ‘‘ The easiest way to defeat ballistic missile defences is to overwhelm them with numbers.’’ Chinese analysts say Beijing’s backing of the new round of UN sanctions reflects frustration with North Korea but not a shift in its underlying strategic calculus. ‘‘ People are fed up with North Korea, but I’m not sure this signifies a new age,’’ said Jia Qingguo, professor of international relations at Peking University. ‘ China’s policies are in atransitional period, China is in a transitional period, andI think this period might be quite long.’’

With NEW YORK TIMES

Copyright © 2013 Fairfax Media

In other words, there is nothing like self interest to spur action. It seems China thinks that the possession of ballistic missiles by North Korea is spurring on the western allies in the Pacific: South Korea, Japan, US. Australia, to do something about protecting their population by building additional alliances and technologies which will negate the affects of the North Korean missile capabilities. This in turn would also negate the effectiveness of China own arsenal.

This is the last thing China wants. Up until now there has been a willingness on both sides – particularly the US and China  to try and work through their differences in order to come to a peaceful accomodation in the Pacific. The growth of a new military  alliance, facilitated by North Korean intransigence, just might make the Chinese come to the same accord I described in my article earlier in the week i.e. a historical agreement to dismantle the North Korean regime in return for with drawal of US troops from South Korea, declare the Korean peninsula politically neutral enforced by UN troops (not including the US), and hold free and fair elections.

The alternative to this will not only be the development of a military alliance of democracies in the Asia Pacific, but the other action mooted in my earlier articel i.e. the withdrawal of the nuclear guarantee to Japan and South Korea meaning they will acquire nuclear weapons aimed straight at China.

These moves might be just what the new Chinese Premier will need to build a case with the PLA, and the remaining hardliners in his cabinet, to move on North Korea.

It would be both historical and highly statesman-like, and may be the dawn of a new Chinese democracy and peace in what is now becoming an unstable part of the world.

It also happens to be the world engine room for growth in the forseeable future. The stakes are high to get it right…

The NBN is all about productivity improvement – ask CSIRO

For those of you who are not aware, the CSIRO has an incredibly interesting podcast called CSIROPOD. It shows off the range and depth of Australia’s leading scientific research institution. For those of you excited by the possibilities of science, like me, to solve the world’s problems, it is just a treasure-trove. Most people do not realise, though, CSIRO is not only “hard science”. It has soft science areas like economics and social research.

One area which it has tackled recently is the area of Australia’s productivity. Apparently, if you take mining and agriculture out of the mix, Australia ranks about 33 out of 36 in the OECD productivity table. This is in stark contrast to almost every other social and economic indicator where Australia usually rates in the top 3 or 4. This is a disgrace.

This interview outlines the challenge, but also the solution:

http://www.csiro.au/en/Portals/Multimedia/CSIROpod/Uploading-the-economy.aspx

What it clearly explains is that there is a solution to this predicament, but it involves Australia as a nation committing to completing the roll out of the NBN fibre to the home, which the coalition are still holding the line about dismantling. This is crazy. Malcolm Turnbull has more than enough ammunition to fire at the ALP on this area of economic policy. He should not also prevent the solution from being arrived at. It is politics in its worst form.

I still think Turnbull is the best leader for Australia at the moment, but he is dead wrong on this one.

The inevitable shift in Australian politics

In June I predicted that:

  1. Tony Abbott will not lead the LNP to the next election, and the blood letting that will preceed his removal will make the defence of Julia Gillard during Kevin Rudd”s recent challenge look like a walk in the park;
  2. Abbott will be replaced by Turnbull; and
  3. Gillard will be replaced by Bob Carr.

Whilst i am not now as confident about Carr replacing Gillard, the tide has turned against Abbott six months earlier than I expected. Admittedly, Gillard has improved her performance considerably in the last three months, and the inate contradictions of Abbott’s relentless negativity has been exposed so the electorate now seems to be waking up to it.

To me the turning points in this process have been:

  1. Leigh Sales demolition job on Abbott on 7.30 when he simply could no longer get away with the blatant lies he had been peddling during and after the last election campaign;
  2. David Marr’s latest political epistle in the Quarterly Essay, this time on Tony Abbott (Marr has form; his effort before this was on Kevin Rudd and many in the Labor Party see that piece as the event which lead directly to Rudd’s removal);
  3. the non-event which was the introduction of the Carbon Tax. Voters now realise the sky has not fallen in, and the exaggeration which has accompanied Abbott’s campaigning against it has been exposed as a sham. They are now asking how much of the rest of his overall scare campaign is as equally unreliable; and
  4. the squabbling internally has broken out big time in the coalition about economic policy. The dries, lead by Joe Hockey, and the wets lead by the agrarian socialists which is most of the National Party, as well as the DLP rump lead by Abbott are at each other throats on this. This is where I believe Abbott will ultimately lose it. He is almost illiterate when it comes to economics, and when he does act it tends toward protectionism and picking winners. This is the last thing that the more economically literate on both sides of politics want, as well as the vast majority of the business community.  Once the polls turn inevitably more decisively against him, this will be the weakness which undoes him.

Ride on Malcolm Turnbull. If he gets a chance, he will win in a canter, to the great relief of three quarters of the population. We can only hope!

Why Gillard Will fall on her Sword

Why Gillard Will fall on her Sword.

In spite of my writing several weeks ago that I thought Gillard would recover lost ground over the second half of 20012, I’ve now come to the conclusion her political end is terminal. She is unelectable. Within two months, one of the Labor elders, probably Bob Hawke, will tap her on the shoulder and tell her it is time to go, and she will be replaced by Bob Carr. Carr will create a resurgent government, and when the polls put Labor in front, the blood-letting on Tony Abbott will begin, which will make the hatchet job on Kevin Rudd look like a game of fencing. Abbott will be replaced by Malcolm Turnbull in the first quarter of next year. then the fun will begin.

Sanity will return to Australian politics, and we might, just might get some constructive debate, and resume the path of reform which has served Australia so well in the last 30 years.

The historic Telco reform…

The announcement this morning of the formalisation of the separation of the wholesale and retail arms of Telstra is a momentious and very admirable micro-economic reform. After the government hands over the $12 billion in compensation to Telstra shareholders, we will have for the first time, all telcos in this country competing on a level playing field. This ranks with the tearing down of the tariff walls in the 1980’s, the deregulation of the banks, the reform of the labour and financial markets, as major economic reforms. Indeed, it may rank in the next 30 years as more important than any of them, but has been a government reform which has been unbelievably badly sold.

The fully connected NBN network has the potential to have as great an effect on the Australian economy and Australian society as the coming of the internet in the 1990’s. Once the society is fully connected to super-fast internet (only certain Scandinavian countries and South Korea has this now), it will produce a flowering of innovation not only in current enterprises but also will see totally new business models emerge. How about an Australia Google, Amazon or Ebay? They will not be the same – no-one knows what they will be – but we have the potential for this to happen because we will have the infrastructure which very few in the OECD will have (partly because they can not now afford it).

This is an historic opportunity. With Australia’s record as being one of the most technology savvy populations in the world, this is an unprecedented opportunity. The government needs to explain this, and get people excited about it. With our productivity performance going backwards over the last five years, this is an unparralled opportunity to reverse this.

What does Gillard do now?

With the leadership battle behind her, Julia Gillard now needs to assert herself, not only over her party, but also over Tony Abbott. One of Rudd’s greatest weaknesses was he appeared like the nerd in the playground versus the school yard bully Abbott. Perhaps it was his ambiguous background, but he certainly appeared to be intimidated by Abbott’s relentless populists attacks.

Over the last week or so Gillard seems to be showing she is made of sterner stuff. Not only has she comprehensively outmanoeuvred Rudd (probably a legacy of her labor roots), but she has bought time to re-assert herself in the minds of the electorate. The new assertiveness, and toughness, will need to be constantly displayed though.

When you think about Abbott, he should be nowhere in the polls. Not only is he outside the Australian mainstream in terms of social policy, but he also shows no competency in terms of economic or nation building policies. So why is he ahead?

Simply, Gillard’s Labor have been unbelievably bad in the business of politics. To get back from this, she needs to:

  1. shuffle her front bench. That does not mean “do nothing” as the Rudd apologists are advocating. Carr and McClelland would have been gone under any prime minister. Simply they are incompetent, and should go to the backbench. With chief headkicker Mark Abbib now gone (is this the first sign of Julia standing up to the “faceless men”?), it allows her to refresh her front bench. I’d move Swann to Foreign Affairs and put a good communicator like Combet into treasury. Pity Lindsay Tanner is not still around, as he had outstanding communication skills. She should take the opportunity to refresh the front bench with talented , young, competent individuals,
  2. she needs a competent Prime Ministerial staff. They frankly have been appallingly bad. It is interesting that when Gillard was painted into a corner while defending the attack from Rudd, she clearly took the reins of the campaign against him, and it was some of the most effective politics of her primeministership. She needs a hard head in there. She does not have it at the moment,
  3. she needs to take the Murdoch press head on. Far too often they get away with lies and distortions which are simply wrong. This needs to stop. The only way to do this is to every day challenge their distortion, however tedious that may be, and
  4. explain the government’s economic agenda. Not in terms of popularism, but in terms of the economic merits of the arguments. Keating in particular did this, and got major reforms through. To treat people as morons might look good in the popularist world of Tony Abbott, but it does not win elections in the long-term.
For all the goings on and instability in the last months, the ALP is only 47 – 53% points behind in the polls. Effectively, a 3% points deficit. A remarkable outcome in many ways, and should be able to be made up over the next 18 months provided the government concentrates on competent government and doesn’t descent into Abbott’s populist realm. Having said that though, all distortion needs to the challenged and repudiated whenever it arises.

Gillard’s changed persona..

I know there has been a lot made “of the real Julia” (largely of her own making), but has anyone else noticed that since she has been backed into a corner by the Rudd challenge, she is a different person. Decisive, resolute, strong, articulate and tough – all words that would not have been used to describe any of her primeministership up until now. And it is a change for the better.

With the average in current polls 46 to 54 in Abbott’s favour (ABC Insiders, 26/2/12), it puts the government in a stronger position than the Howard, Keating or Hawke governments at this stage in the election cycle. Given their strong story of legislative achievement in spite of their minority position, and the continued unpopularity of Tony Abbott with a significant section of the Australian community, it is not beyond the possibility that in 18 month’s time Gillard’s government might survive against all odds. If this happens within 12 months, watch for leadership speculation to shift from the ALP to the Liberals. There are a significant number of Liberal politicians and supporters who are as appalled as the rest of us at the prospect of a Tony Abbott government. A Malcolm Turnbull lead LCP sounds a lot more acceptable, which (hopefully) the parliamentary party will come to believe also.

This though depends greatly on Julia continuing to be her new decisive, and resolute self. it remains to be seen…