Guy Beres

One of the most publicly prominent foundation stones of Federal Labor’s “education revolution” policy program was the so-called National Secondary School Computer Fund. Under this policy, announced during the November 2007 election campaign, a Rudd Labor Government would theoretically provide access to a dedicated computer for every Australian student in Years 9 - 12. Secondary schools across the country would be able to apply for capital grants of up to $1 million each from the government for funding either the upgrade of existing computers or purchase of new computers for this purpose. Although the actual educational benefits of this policy are a little on the nebulous side, the summary policy principles were sound, and one would have to assume that it was a potentially vote-turning policy for the then Rudd Opposition going into election day.

Unfortunately, there is one aspect of this policy program that leaves something to be desired from the perspective of no doubt many schools and of course the state and territory governments; namely, the funding of second-order costs for all this new kit. Who pays to install, configure and maintain all these new computers that the Rudd Government wants to parachute into schools? Who pays the increased electricity bills that will no doubt result from all this new energy consumption? How will all the computers be housed, bearing in mind that many secondary schools across the nation suffer from a lack of teaching space as it is, let alone if they have potentially over a hundred new computers to support? The NSW Government, struggling as it is at the moment with a range of financial and political issues, has just in the last week announced itself as the first to withdraw its support for the program. It remains to be seen whether the Rees Government’s rebellion will lead to something of a domino effect amongst the other state and territory governments, but clearly Federal Education Minister Julia Gillard and the Prime Minister need to have a good hard think about how the potential fallout from a collapse in support for the program should be managed.

As I am sure any senior manager in a decent-sized government department or business can tell you, hardware procurement is usually one of the less risky and more manageable components of an organisation’s information technology services. Where costs tend to blow out on IT projects is when mid to long-term factors like the costs of providing ongoing support and maintenance are not factored into the equation. The phrase “a computer for every school kid” seems like a simple enough proposition and appears from the very outset to be quite an attractive one, but one does have to wonder whether the mid to long-term costs of this proposition were adequately investigated by the Rudd Opposition before it embarked on this policy.

Is it fair and reasonable to expect that the state and territory governments have to cough up the money to install, support and maintain all the new hardware that the federal government has dumped on them?

The new Federal Opposition Leader’s opening gambit on the populist rhetoric front has been to attack the Prime Minister over his decision to attend the annual meeting of the United Nations General Assembly. For my money it is a cheap and uncompelling shot, for all except perhaps the Liberal Party’s most sour-faced and envious supporters. Rudd has reportedly been on eight foreign trips over the past nine months, which to this taxpayer at least, does not seem excessive. Unlike the comparatively unilateralist era that was ushered in by the previous government, Australia under Federal Labor is once again interested in engaging the world with open arms, lead by a man who understands global politics arguably better than anyone who has ever held the position. It would be a waste for Rudd not to use his not inconsiderable diplomatic talents and experience on the global stage as much as possible; indeed it would arguably be contravening Australia’s national interest not to in most circumstances.

In any case, Rudd himself responded more than adequately, methinks, to this related question from Kieran Gilbert of Sky News:

GILBERT: You’re heading off to New York this afternoon. You’re going to miss the rest of the week in parliament. Why do you need to go?

PM: Well, this week in New York the annual meeting of the UN General Assembly will have heads of government from 122 countries around the world including the heads of government from 13 of the world’s 15 major economies.

There’ll be one subject, one core subject on people’s mind, and that is the global response to the global financial crisis.

And there are two schools of thought here. Either you can go down the populist road, the opportunistic populist road, which is what various people in politics are championing at the moment and not go, or you can act in the national interest. My judgment is that my responsibility as Prime Minister is to act in the national interest, which means working through with other heads of government the best response to this global financial crisis.

Australia has to have a seat at the table, not just sort of hang out to one side an expect everyone else to kind of solve it. That’s not how it works.

Apparently Malcolm Turnbull would prefer to bury his head in the sand and let the rest of the world discuss these sorts of pertinent problems without his, or Australia’s input.

Linton Besser’s story in the SMH today notes that the Iemma Labor Government’s submission to the Rudd Government’s aviation review calls for a second “Sydney” airport in Newcastle. All public submissions to the review are available on this page, and some of which no doubt make for interesting reading.

The major problems facing the Rudd Government in this area are now three-fold; guiding Australia’s largest city towards an aviation solution that adequately meets the nation’s transport needs, ensuring that any new airport constructed is as environmentally sustainable as is feasible, and overcoming the intense “nimbyism” that is bound to ferment as a result of any proposals for a new airport in the Sydney area. Despite the obvious environmental concerns associated with building a new airport, I don’t think there is any doubting that Sydney can not expect to be able to sustainably service all its international traffic over the coming decades with Kingsford-Smith Airport alone. Building a new airport perhaps just outside the Sydney basin but a reasonably short train journey away from the city is probably the correct answer, and in this respect the NSW Government may be on the right track.

My travels in London have informed me somewhat in the potential benefits of this approach: in London there are no less than five international airports within a one hour train trip of the central business district. High speed private rail links or public rail links, together with high frequency private coach services operate in combination on a 24-hour schedule between each airport and key corners of the city. While I don’t believe that Sydney needs to service anywhere near as much air traffic as London, I have little doubt that the flourishing of London’s secondary international airports have produced many good outcomes. Airports like Stansted Airport have created new jobs, stimulated the local economy, reduced the numbers of people who need to drive to and from the airport, increased competition in the airline industry and reduced the cost of airfares.

If the Rudd Government selects an appropriate location for Sydney’s second international airport, is careful to engage the local community through extensive consultation, and manages the construction and ongoing operations of the airport in an environmentally sustainable manner, this historically controversial and difficult nation-building project could, at long last, prove to be a success.

Of course it needs to happen and be a success, and not just to help service Sydney’s growing aviation requirements; for the sake of the sanity of people living within 10-15 kilometres of Mascot, something needs to happen over the course of the next decade.

It would seem that in our modern, heavily tactical form of democracy that voters are only given a right to vote for the party of their choice when that party decides it is politically worthwhile running a candidate. As Phillip Coorey reports for the SMH, it is looking like Federal Labor is not going to run a candidate (or else only half-run one) in the Mayo by-election forced by the resignation of Alexander Downer. This strikes me as little more than political cowardice from the government, coming as it does a mere eight months after its thumping general election victory. While it may be a foregone conclusion that the Coalition will retain the seat (it is a safe Liberal seat, of course), one wonders why Federal Labor is avoiding the opportunity to try and make this by-election a referendum on Brendan Nelson’s leadership. A few months ago, Kevin Rudd seemed pretty much indefatigable in his role as Prime Minister and Brendan Nelson had all the pressure on his shoulders, his senior peers walking around with sharpened knives at the ready. Does the government really fear that this has changed and that any opportunity to further pressure the Opposition has been lost? Does it want to look to the punters like it is running scared?

The decision to only pursue the by-election halfheartedly seems to be centred around a desire to starve the Coalition of any potential political oxygen. It goes without saying that by far the most likely outcome in Mayo is a victory for the Opposition, and that therefore some positive news coverage for Nelson would eventuate if Labor field a candidate and lose convincingly. From a purely political standpoint, this rationale is not without credence, and certainly we have here in the UK an excellent recent reference point for Labor in the recent Henley by-election in Oxfordshire. There are some telling similarities. In Henley, like Mayo, the by-election was forced by the resignation of a popular, high-profile conservative figure (Boris Johnson, now London mayor), in a safely held seat. Labour decided to field a candidate in the Henley, but did not put very much effort into the campaign, producing a truly abysmal result; fifth place behind the Tories, the Liberal Democrats, the Greens and the British National Party. Embarrassingly, the combined primary vote for the UK Independence Party’s Chris Adams and Bananaman Owen of the Monster Raving Looney Party superceded that of Labour’s Richard McKenzie.

In the Henley case, then, fielding a candidate and running a half-hearted campaign was indeed a disaster. There is little chance that Labor stand a chance of doing quite so badly in Mayo. Crucially, Labour’s Gordon Brown is polling at subterranean levels currently, whereas by comparison, Kevin Rudd and Federal Labor enjoy a comfortable lead in the polls, and have done so for the past eight months. In this sense, we are really comparing apples and oranges with these by-elections.

I really don’t think that this is the right time for Federal Labor to give into political convenience and go on the defensive by steering clear of Mayo. The Rudd Opposition was successful in the general election last November in part because of its aggression, exemplified by the gambit of fielding Maxine McKew in John Howard’s once blue-ribbon Liberal seat. Federal Labor also won support by taking a noble line on issues like electoral reform and transparency in government (hat lift: Senator John Faulkner) in stark contrast to the grubby politics that the Howard Government accustomed itself to. It may not strictly speaking be the most politically expedient course of action, but fielding a candidate in Mayo and putting some energy and resources into the campaign is both the smart and the right thing for Federal Labor to do here.

If I was Kevin Rudd I would be quite royally pissed off about all of this. Perhaps its best for Belinda Neal and/or John Della Bosca to both fall on their swords in advance of any inquiry findings. Federal Labor has been damaged enough by this tawdry episode as it is.

Dear Mr Rudd: Ideas For A Better Australia is a compilation of short essays served up by a decent cross-section of “leftish” Australian writers, edited by Robert Manne. The book, which has been criticised in The Australian as a “wish list” and Manne as a “nervous suitor writing a love letter”, seems to hope to offer Australia’s new Prime Minister a sense of progressive direction in relation to several key policy areas.

The opening piece by Associate Professor Mark McKenna from the University of Sydney sets the tone for the book by looking first to the republican debate. While I would consider myself a fairly staunch republican, like the Prime Minister, I do regard the republican debate in Australia as something of a second order issue. I do think the time is right for Australia to set the wheels in motion and move the country towards its preferred republican model, but I also think that when we talk about a republic we are talking primarily about symbolic change. Removing references to the British monarchy from our constitution and our processes and symbols is a necessary evolution if we consider ourselves a truly independent nation, but it hardly puts food on the table of people living in poverty or does anything to ensure that the next Australian generation of adults is the best-equipped to participate in the global economy in national history.

McKenna, perhaps unsurprisingly given that one of his primary research interests is the history of Australian republicanism and monarchy, seems at least in his expression to take a somewhat more aggressive view on the republican debate. Take for example this synopsis of people’s feelings after Federal Labor’s victorious election campaign last year:

If I were asked to choose one word which reflected the feelings of many Australians following the election of the Rudd Labor government in November 2007, the word I would choose is hope. It is a cautious hope, but it is hope nonetheless. One reason for this hope is that Australia might finally build a national consensus on the two great nation-defining and still unresolved issues of the last two decades, the declaration of an Australian republic and the achievement of reconciliation with Aboriginal people.

I think McKenna is spot on when he talks about the election result restoring a sense of “hope” to federal politics in Australia, but I think his partial attribution of this hope to the republicanism and reconciliation questions is debatable at best. Even in view of the government’s triumphant apology to the stolen generations, it is personally quite hard for me to imagine that either reconciliation with the Aboriginal people of Australia or getting rid of incoming Governor-General Quentin Bryce keeps too many average Australians awake at night. These are issues that some Australians feels strongly about, and rightly so, and I suspect that the majority of Australians have formed some sort of opinion on them. However, I do believe that the majority of people out there are basically ambivalent about these two issues that McKenna so bravely describes as the two great nation-defining issues of the last two decades. It’s perhaps a little painful as a progressive to think about them in this way, but I think all in all, Australia would classify reconciliation and the Australian republic as “nice-to-haves”, and not definitively crucial for the immediate governance of the nation.

McKenna goes on to discuss the next step for republicanism in Australia, which he believes to be the adoption of a new constitutional preamble:

The next part of the republican story involves the task of defining the core values of Australian democracy in a new constitutional preamble. A preamble is necessary, not because of some out-dated Jeffersonian obsession with grand rhetoric, but because the time has passed when Australian can assume its values are understood.

I am not sure how this short excerpt strikes other readers, but it strikes me as completely the wrong approach if Australia is to successfully pursue the republican question; McKenna is engaging in the Jeffersonian obsession he speaks of perhaps even without realising it. The Australian constitution is not like the constitution of the United States of America; it does not play a central role in the civic life of ordinary Australians. Australians do not cite clauses of their constitution in everyday life as Americans do with their umpteen amendments. Revising the Australian constitution to add a preamble as a step in isolation is likely to mean a lot to a few Australians with some vested intellectual interest in that document, but next to nothing to the vast majority of them without such an interest. To be honest, I am not sure there is any way that proponents of an Australian republic could more effectively expose the soft symbolic underbelly of their arguments for minimalist change to their opponents.

If the average Australian is interested in Australia becoming a republic, they are interested in it because they want a truly Australian head of state. This change must form the heart of the republican proposal that is put to the Australian people; proposals that deviate from having this basic change at its core are doomed to failure. Like Rudd’s moving apology to the stolen generations indicated, Australians from all cross-sections of the population are prepared to embrace symbolic changes if they are framed in the right way. The push for an Australian republic must bear this clearly in mind if it is to succeed; even the most cynical Australian is prepared to accept largely symbolic reforms and gestures, but these reforms and gestures must sit comfortably in alignment with what they really want, with minimal deviation in deference to elite opinion.

From a blatantly partisan perspective I guess I am somewhat pleased that the RBA has deigned to stick its neck out and suggest that the Rudd Labor Government’s first budget is “mildly contractionary” overall. As Scott Murdoch notes for the SMH, this is manna from heaven with respect to economic credibility for the government. Certainly what we have seen over the last few months is that different economic commentators have interpreted the budget differently, with the result that the mainstream media outlets have been polluted with mixed messages. Inherently this sort of environment benefits the Federal Opposition, with Shadow Treasurer Malcolm Turnbull needing only to reference the expert opinion of some of the commentators who heavily criticised the budget to score some points. The government can of course reference the expert opinion of other commentators who offered begrudging approval, but the result of such a rebuttal is that the average observer is left feeling unsure of who they should really believe.

In this modern era of economic conservatism, of course, the opinion of the RBA board is held in markedly higher esteem than your average economist, and it is likely that Federal Labor is going to be able to dine out on this little “mildly contractionary” comment for some time. The “is not”, “is too” squabble between those two argumentative siblings in parliament (Wayne and Malcolm) has arguably just been settled for the time being; settled by the booming voice of an angry father that leaves Malcolm somewhat chastened and Wayne quiet, but vindicated.

Part of me can’t help wondering, though, whether the RBA board has gone too far by including an explicit summary interpretation of effect of Labor’s budget policies in its public minutes. The crucial line from the minutes is as follows:

Measured in terms of the change in the surplus, fiscal policy was expected to impart a mildly contractionary effect on the economy in 2008/09.

It is one thing to suggest that a certain policy measure is likely to be on balance inflationary or inflationary, and quite another to suggest without rigorous and public explanation that fiscal policy is on the whole inflationary or not inflationary. To be honest, I would have thought it was bordering on misleading to attempt to interpret fiscal policy based solely on the state of the surplus, without at all considering the associated policy measures that the government has implemented.

It’s likely that this little observation from the board was included flippantly rather than because the board’s impartiality is in question, but either way on the whole I don’t think it is particularly helpful – except for making the government feel a little good about itself.

Farrah Tomazin reported in The Age last week that the Rudd Government appears to be getting just a bit cheeky with another one of its election promises, this time in relation to the provision of individual computers to all high school students in Years 9-12. Education Minister and Deputy PM Julia Gillard seemed to be engaging in a spot of pragmatic goal-shifting when announcing the funding in Essendon a few days ago:

“In the first few rounds of this program, we are taking schools to a ratio of one to two,” Ms Gillard said as she announced the long-awaited funding at Essendon East Keilor District College yesterday.

“Schools that have participated in this round will be able to apply in other rounds for further resources, but we wanted, in the initial stages, to make sure that students around the country benefited from a ratio of one to two.”

Tomazin does not shirk from interpreting these comments as effectively a broken election promise in her story. However, even without considering the financial aspect, for plain and simple operational reasons it makes sense to roll out the promised computers incrementally. Allocating 100% of the computers required for a small subset of schools in this first phase of the funding allocation (the current allocation has a five year budget) would mean that some schools may miss out on funding altogether until the final phase of the process. It would also immediately burden schools (particularly those with limited existing infrastructure and resources) with a small cache of computers with considerable maintenance, power and access requirements, requirements that need to be met as soon as possible in order for full value to be derived from the venture.

In short, I don’t think this announcement from Gillard reflects a true shift in either rhetoric or intentions. What I think is far more likely is that the financial and operational considerations associated with introducing over $1 billion in computing equipment to schools across Australia have forced the government to be pragmatic about how it delivers. Until the delivery has been fully completed, the jury should remain out on the question of whether this particular election promise has been met. I don’t think Tomazin is being fair in jumping the gun here, and nor do I think there is much to be gained for the Opposition from the current situation with this policy.

I have to confess I am a bit bewildered by Greg Sheridan’s column in The Australian today and his likening of Kevin Rudd’s foreign policy style to that of former Malaysian leader Mahathir Mohamad. Paul Keating might have publicly expressed his disapproval in relation to Rudd’s Asian union proposal this week, but I hardly think that he would view Australia’s Prime Minister in the same light as he did Mahathir.

The following synopsis contains the gist of Sheridan’s argument:

Kevin Rudd is in danger of turning what should be his greatest strength into a serious weakness. I refer to his weird and increasingly ratty habit of announcing foreign policy initiatives of soaring ambition and utterly amorphous content on the run, half baked, with nodetail and no credible prospect of success.

…

If you announce twice a week that you’re going to save the world and you manifestly lack the means to give the slightest effect to your pronouncements, the world soon loses interest. The chief casualty is your credibility.

I don’t think anybody is seriously anticipating that Kevin Rudd is single-handedly going to “save the world” by throwing these proposals out there, or is even remotely attempting to. Being an international political superhero is clearly not the intention of the government in being expansive; realistically, the intention of the government is to make hay while the sun shines and try a few things that might actually serve to improve the global political scene and Australia’s corner of it. I have little doubt that some of these proposals will not actually result in meaningful improvements to the current situation that Australia finds itself in. I also have little doubt that some actually will.

In writing this column, methinks Greg Sheridan must be suffering from some form of foreign policy initiative starvation syndrome, no doubt a symptom of the hopelessly uncreative and unadventurous Howard/Downer years. Over its decade in office, the previous administration increasingly lost interest in trying bold new things and trying to “seize the day” in its policy pursuits. Comfy stagnation was rejoiced in by the government and in the mainstream media. A certain thematic routine with respect to foreign relations was established and adhered to, evolving gradually into a wholly uninspiring policy norm.

In trying to play catch-up for the last decade over the past few months, the Rudd Government can hardly be blamed for being expansive and throwing some ideas out there. With respect to foreign affairs, there are certainly a number of norms out there that the previous government established that deserve to be smashed. The progressophobia that Sheridan seems to be lamenting the loss of in his column today is one of them.

The Rudd Government’s foray into the car manufacturing industry looks set to divide expert commentators. The Australian is already running what seems to be a fairly strong editorial line in opposition to the $35m subsidy granted by the federal government to Toyota towards the development of a hybrid Camry, on the grounds that Toyota was going to fund the development regardless. It goes without saying that your average economist is probably going to be very sceptical that such a grant amounts to much more than rank economic protectionism; an approach that should have been buried last century. On the other hand, one would imagine that the average environmentalist is going to feel generally positive about the grant, which has been matched with another $35m from the Victorian Government.

Philip King’s observations in The Australian exemplify the orthodox economic argument:

There’s only one winner out of the announcement that $35 million will be handed to Toyota to produce a hybrid Camry in Melbourne. It isn’t the Government, the car workers, the environment or the Australian consumer.

It’s Toyota.

…

It means threats by a senior executive last year that Toyota might quit Australian manufacturing can now be put on hold, for a few years at least.

Beyond that, the dividends look dubious in the extreme. Toyota was on track to make the announcement in a few months anyway and claims it already had the business case sewn up.

I am neither an economist nor an environmentalist in the formal sense, but I am a little sceptical about the real benefit that this grant will bring. By the sounds of things this grant has been made to Toyota effectively as a kind of reward for exhibiting willingness to pursue the development of hybrid technology. It does not seem that Toyota’s work on a hybrid Camry was contingent on receiving the subsidy; it was going to happen anyway. However, now that the company is to receive the subsidy, it has also been burdened with a greater degree of public responsibility with respect to green car development. Toyota is directly receiving funds from taxpayers, and I am sure that the Rudd Government and indeed taxpayers will make it clear that they want something in return for their investment.

This first grant from the Rudd Government’s $500 million Green Car Innovation Fund does represent something of a watershed, and it does fly in the face of the established economic orthodoxy. It will make the usual suspects angry as a result, but I am not sure we can seriously expect a workable alliance to be built on climate change issues without some give from both industry and the taxpayer. That this grant also represents a pork barrel salve for Australia’s slowly dying car manufacturing industry is perhaps too politically convenient for Federal Labor for comfort, but the mere fact that this is an economically unorthodox step does not mean it is a misstep. Over the coming days, I expect that we will see a number of conservative economic pundits make the mistake of rebutting the rationale for the grant based on a dogmatic argument rather than a reality-based argument.