Guy Beres

With an interest rate cut all but announced for tomorrow, I have been bemused to observe the public debate on interest rates once again focus on a red herring. Treasurer Wayne Swan has taken the brave and perhaps politically unusual step of declining to demand that Australia’s banks pass on the hypothetical interest rate cut to consumers. Shadow Treasurer Julie Bishop has taken precisely the opposite tack, criticising the government for not demanding that the banks pass on the cuts:

Reserve Bank governor Glenn Stevens has reportedly told Prime Minister Kevin Rudd that squeezing the banks too hard could make it unprofitable for them to lend and push the Australian economy into recession.However, opposition treasury spokeswoman Julie Bishop said passing on the full RBA cut would help keep people in jobs and the Australian banking sector stay strong.

“One of the most important ways to keep our financial sector strong is to ensure that Australians keep their jobs so that they can pay off their mortgages … their bank loans,” she told reporters in Perth.”

And that is why if there is an interest rate cut tomorrow it should be passed on in full so that people can keep their jobs and keep paying off their financial obligations.”

This debate raises some interesting questions about what Commonwealth Treasurers should and shouldn’t do, or perhaps more interestingly, what they realistically have the influence to do. Should Wayne Swan really be getting on the blower, as Julie Bishop seems to be suggesting, to the chiefs of the big five tomorrow and demanding that they immediately pass on the hypothetical cut to consumers? Does Julie Bishop, a so-called economic rationalist, have so little faith in the market that she feels the Treasurer needs to instruct individual private organisations on how they run their business? Put simply, it is an absurdity.

There are three points worth making here in rebuttal to Bishop’s foolishly populist demands:

1) It is not the Commonwealth Treasurer’s role to attempt to run the business of Australia’s big five banks by demanding that certain monetary policy actions be taken;

2) The Treasurer’s views are probably the least of the concerns of Australia’s big five. They are businesses answering to their customers and shareholders, not the fiefdoms of the Treasurer. here Any views that Treasurer Swan attempted to impose upon them would almost certainly be ignored;

3) It is almost a certainty that one of the big five will elect (if not immediately, than in the relatively short-term) to cut rates and seek to make their offerings more attractive to consumers. When this happens, there is a pretty good likelihood that the others will follow suit in due course.

This is not a good start from Bishop. One wonders whether the Turnbull Opposition is going to suffer for not having someone who can reliably score the odd point (e.g. the Opposition Leader!) against Swan opposing him in the Shadow Treasury.

Some lessons learned after buying and taking the time to digest this book:

1) There are arguably literary reasons why few on the Liberal side of politics have had accounts of their time in the party published.

2) Never engage your stepfather to “ghost-write” your memoirs.

Although The Latham Diaries was a spiteful and often ill-considered piece of work in the context of the Labor Party, it was also very well written and a pleasure to read. The Costello Memoirs, I’m sorry to say, was not really a pleasure to read. I am not sure what Peter Costello was aiming to shed light on by publishing this book, but the tome that has emerged from the writing process is a banal and slightly confused historical summary of his experiences in the Howard Government. If you know a bit about politics and have followed the ebbs and flows of the Liberal Party’s political fortunes federally over the last decade, you may find that reading this book does little more than jog your memory.

Moreover, should you decide to read The Costello Memoirs, you may even find that it befuddles your memory rather than jogs it; its structure in some respects defies chronology. The book often takes on something of a rambling style, almost as if events are described in the book as they came to the minds of the authors, rather than where they reside in the chronological context of the story. This book seems made for episodic excerpting in the glossy magazines of the nation’s Sunday newspapers; as a singular tome, however, it comes across as shallow and choppy.

The opening chapter takes the reader to the night before last year’s federal election, setting the scene for the removal of the Howard Government from office. The next couple of chapters seek to describe Costello’s life growing up and his ascent (descent?) into the ranks of the Liberal Party and then onward to parliament. Chapter Three (focusing on the “Dollar Sweets” case) is a minor masterpiece of character assassination with respect to the union movement, somehow managing to completely ignore the good things that unions have done in this country whilst perpetuating all the Peter Reith-inspired stereotypes. The remaining majority of the book is purportedly focused on the Howard Government’s four terms in office, but chronologically speaking it is all over the shop. “Chronological” chapters are interspersed with “issues-based” (e.g. the Asian Financial Crisis and “leadership”) chapters throughout the book, with the result that, for example, Costello rambles on about Andrew Peacock’s up and downs in the Liberal Party in the 1980’s after describing the Howard Government’s third-term in office. Continuing in this ramshackle vein, the last chapter in the book takes a look at some of the “unfinished business” that the Howard Government left behind, and it is only in this chapter that Costello delves in detail into the republican debate and referendum of 1999.

In buying this book, I guess I was hoping for a few things. Specifically, I was hoping to learn a bit more about Peter Costello the man, how he really thinks about politics, and his candid views on the trials and tribulations of the Howard Government. Perhaps it is a function of the fact that Costello is still in parliament and all it is all too soon for this book, or he is just too much of a “gentleman”, but I am not sure that we are reading the real Peter Costello in The Costello Memoirs. It still feels as though we are reading an uber-polite, straitjacketed version of what the former Treasurer really wants to say about the Howard years, cloaked in cobwebbed triumphalism. It does make me wonder whether some part of Costello is still undecided about his future, and quietly hopeful that his colleagues will carry him on their shoulders to the front lines of battle again, as Opposition Leader.

If past experience is any guide of course, he will need to be carried on the shoulders of his colleagues into the fray; he certainly won’t be leading the charge.

The August 11 edition of TIME Magazine featured philanthropist and Microsoft founder Bill Gates on the cover, and included a somewhat interesting article by the man himself on the topic of “creative capitalism”. As arguably one of the greatest individual beneficiaries of the capitalist system in the twentieth century, I suppose that we should not be surprised to hear that Gates believes that capitalism does have the potential to lift the third world out of poverty and into the marketplace. On the other hand, it may be surprising to some to hear that one of the most successful in-practice exponents of market domination ever believes that capitalism should be bent to meet the needs of the less unfortunate.

This passage from the article sums up Gates’ philosophy quite succinctly (p.28):

As I see it, there are two great forces of human nature: self-interest and caring for others. Capitalism harnesses self-interest in a helpful and sustainable way but only on behalf of those who can pay. Government aid and philanthropy channel our caring for those who can’t pay. And the world will make lasting progress on the big inequities that remain - problems like AIDS, poverty and education - only if governments and non-profits do their part by giving more aid and more effective aid. But the improvements will happen faster and last longer if we can channel market forces, including innovation that’s tailored to the needs of the poorest, to complement what governments and nonprofits do. We need a system that draws in innovators and businesses in a far better way than we do today.

In short, he is something of a modern-day socialist. Gates cites C.K. Prahalad’s work The Fortune at the Bottom of the Pyramid (which sounds like an intriguing read!) in formulating his thoughts in the article, which revolve around the fact that there are many markets all over the world that the free market system has essentially looked over. Effective markets have not arrived in some impoverished developed countries, and the blame for this can clearly not just be laid at the feet of the despots who lead some or perhaps many of these places. Free-ish markets have failed to deliver wealth to the world’s poor over the last few decades, and clearly need more of a push from the public and non-government sectors.

It is deeply ironic that despite the fact that Gates is almost universally maligned today as the former leader of the world’s least cool software company, the work he has done in his industry and is now involving himself in is quite frankly invaluable to the world at large.

ELSEWHERE: There’s a video featuring Gates’ thoughts on the topic here.

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?

It is of concern to hear that new figures released by NSW Health suggest that there has been a 59% increase in alcohol-related emergency department cases in NSW from 2000 to 2007. Let’s be blunt; in today’s modern era of global financial upheaval, governments across the country can scarcely afford to continue to fund people’s alcohol-related stupidity. We are perhaps at the point now where some new measures need to be introduced to try and turn this concerning trend around. NSW Health Minister John Della Bosca has expressed a willingness in recent days to do just that, although the proposals he has floated as possibilities so far seem only to be targeting the advertising arm of the alcoholic beverage industry (e.g. the introduction of warning labels and a full or partial ban on alcohol advertising).

To be honest, I am not sure either of these measures in isolation will achieve anything near the desired result. If the campaign that has been waged on tobacco over the last decade by both the public sector and NGOs has taught us anything, it is that a co-ordinated campaign has the best chance of making long-term inroads. It is of course a difficult task for a government in any country to “crack down” on a national pastime that has gotten somewhat out of control. The liquor industry and powerful industry organisations like Clubs NSW and the Australian Hotels Association would no doubt fight any measure from the government that threatened to eat into alcohol sales. Unless a bipartisan approach to the issue was forged by Labor with the Coalition, there is also little doubt that the Liberal Party would seek to fight any measures that could conceivably damage the alcoholic beverage industry, citing their doctrine of individual choice and responsibility. A frighteningly stereotypical rag-tag mob of yobs, publicans and anti-regulation zealots would then almost certainly jump on the Liberal Party’s bandwagon, and the NSW Government would suddenly have a difficult fight on its hands given it’s extremely vulnerable political position at the present time.

What I would encourage the NSW Government to pursue is a long-term, multi-tiered strategy for reducing alcohol abuse in the state. Policy measures introduced to begin with should be relatively moderate, with pre-legislated increases in the rigor of measures if annual targets are not met on an ongoing basis. While limitations or outright bans on advertising in some sectors should be considered as part of this strategy, I think the government also needs to attack alcohol abuse from other avenues. Carefully conceived information campaigns (such as the Quit for Life campaign) and the more recent punitive negative advertising introduced by the Howard Government in relation to tobacco also clearly have a role to play. People across the country (and in particular young people) need to be reminded and understand that they will turn into blithering morons after a certain number of drinks, and that it’s not “cool” to be in that state, it’s actually pretty sad.

Despite the prevailing economic orthodoxy, it remains true that targeted increases to taxation can also be a powerful part of a co-ordinated government strategy. I think there are grounds, given these recent figures, to increase the amount of excise on alcoholic beverages in NSW, particularly if the excess funds gained are pumped straight into programs that seek to minimise alcohol abuse. Given the increasing scale of costs, private and public damage, injuries and death that alcohol abuse causes every year in this state, surely it is only fair to expect that alcohol consumers cover more of the public costs that their hobby generates when it is taken to excess?

I am normally a staunch defender of the Senate as a house of review and debate. The upper house of parliament affords our political system with a much needed sense of balance; it is a forum through which the normally sizable minority (e.g. over 40%) of people who did not vote for the government can have their voice heard. Although this means that the views that I support don’t always get enshrined in legislation in an unadulterated fashion, this is merely a captive concern. I think from a democratic point of view that legislation agreed as part of a majority political compromise is in many cases the fairest result for the Australian people.

On the other hand, I don’t support antics like these from Family First Senator Steve Fielding. I don’t accept that representatives of the Senate who were elected with less than 2% of the vote over four years ago have the right to effectively block or significantly alter legislation introduced by a government endorsed at the polls less than a year ago. The fairly absurd Senate lottery system that we have in this country sometimes hands power in excess of what the electorate intended to individual members. Therefore, representatives in the Senate who have such a small proportion of the nation’s voters behind them (as Fielding does) need to strive to wield their power in a manner that is cogniscent of their actual support in the electorate. Fielding has metaphorically been granted a gun licence by the electorate to use in self-defence, but recently, he has been using it to cap anyone who doesn’t bow down to his “supreme authority”. That’s just plain wrong.

The people of Australia did not really want Steven Fielding or Nick Xenophon to be the supreme legislative arbiters of this country; that is what has happened as an unfortunate consequence of our electoral system. I believe that senators who act in a way that runs counter to the spirit of the office they hold and the representation they actually enjoy should be censured. The sort of behaviour I am talking about is not unconstitutional, but if our constitution was defined more rigorously and in a manner befitting the times we live in, it would be regarded as such.

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.

As I have previously commented, I don’t think too many people are surprised that Malcolm Turnbull has succeeded Brendan Nelson as the leader of the Liberal Party. There has been no real indication throughout 2008 that Doctor Nelson was eventually going to cut through and threaten Kevin Rudd as a genuine alternative Prime Minister of this country. It is not so much that Brendan Nelson has a divisive personae for the Liberals, but rather just that he failed to threaten the government to a significant enough extent. There was little question that the Rudd Labor Government would secure a second term in office in 2010 if Nelson was left holding the reins.

The interesting thing about Malcolm Turnbull, of course, is that he does have a divisive personae for the Liberal Party. In a political sense he is well to the soft left of the vast majority of the Liberal parliamentary caucus, and one would imagine that he has little time for the agrarian socialism of the National Party. He came to the party late and reportedly only after being denied a position in the Senate for the Labor Party during the 1980’s. In this respect, there are no doubt quite a few members of the Liberal caucus who resent the fact that Turnbull has swept in from the wings to the leadership of the party without having to go through the day-to-day political grind that they had to endure.

It’s worth considering for a moment the results of the leadership spill vote. For starters, Turnbull only was victorious by a margin of 4; if three caucus members had decided to instead plump for Nelson, than Turnbull would have failed to secure the leadership again, and his immediate future prospects would have been reasonably assumed to be in tatters. Ironically, it appears that several conservative members of the caucus may have delivered the vote to Turnbull. Tony Abbott, Alex Hawke, Bronwyn Bishop and Louise Markus all voted for Turnbull; presumably not because they agreed with his political views or indeed particularly like him, but rather because they wanted someone who they thought would be a little more effective in the leadership role.

This is of course a very Howardian way of thinking. The substance of Malcolm Turnbull in a political or policy sense was not what has elevated him to the top job; what has elevated him to the top job is his charisma, eloquence and marketability. If Turnbull does a reasonable enough job of competing with the government and doesn’t try to be too progressive, this won’t be a problem for the Liberals. As it was with the Howard years from about 2000 onwards, if the electorate warm to Turnbull then the Liberal caucus will undoubtedly warm to him, even if they don’t actually agree with him. It’s the poll figures, not the policy, stupid.

Clearly the jury will be out for some time and Turnbull has a lot of convincing to do. While you have traditionally Liberal-affiliated groups like Australians for a Constitutional Monarchy sobbing into their English Breakfast tea, and leading conservative columnists like Miranda Devine still hopelessly longing for an utterly implausible return of the Liberal Party’s great woulda-coulda-shoulda ex-Treasurer, you just know that there will be a few more twists in the tale of this story yet.

Yesterday evening (and for the first time in a while) I got along to a NSW Fabian Society forum in Sydney, this one focusing on the following topic:

In years gone by the Left was a serious political force that held sway in once powerful trade unions, the Australian Labor Party and the broader community. The battles between the left and right for the control of the Labor Party were legendary. In recent years the Left has ceased to be a powerhouse for ideas.

Is the Left dead and does it really matter?

The debate was moderated by Rose Jackson, featuring the following speakers:

Professor Geoff Gallop (Former WA Premier and now Director of the Graduate School of Government at the University of Sydney)

Rodney Cavalier (Former NSW Education, Energy Minister)

David McKnight (UNSW Academic and author of Beyond Right and Left).

My thoughts and potted recollections from the night over the fold.

Read the rest of this entry »

I am only about a month and a half late, but back in early August I was tagged by Oz over at Decomposing Trees with this meme:

List seven songs you are into right now. No matter what the genre, whether they have words, or even if they’re not any good, but they must be songs you’re really enjoying now, shaping your spring. Post these instructions in your blog along with your 7 songs. Then tag 7 other people to see what they’re listening to.

I am going to decline to tag seven people to pass the meme on to, but if you’re reading this and interested, please accept this as an invitation. Anyway, here are my seven songs:

Bloc Party - Mercury YouTube
I first heard this track when I saw Bloc Party open their set with it at the Hydro Connect Festival last month. It’s a great track - loads of energy - and despite the fact I have heard it exactly once, it has burrowed its way firmly into my head.

Sigur Ros - Gobbledigook Video - Not Safe for Work!
The opening track of the increasingly iconic Icelandic band’s latest album, this song is quite simply the sound of pure joy. An very interesting diversion from the band’s trademark slow-building crescendos.

Youth Group - In My Dreams
One of the standout tracks from Youth Group’s recently released follow-up to their breakthrough Casino Twilight Dogs album, The Night Is Ours. Some great pics and a link to the first single from the new album over at Boudist.

John Butler Trio - Peaches and Cream
I have an extremely limited CD collection to draw upon in my car currently, and one of the few CDs I have is JBT’s ragingly successful Sunrise Over Sea. Is there anything like driving through the gumtree-smattered suburban roads of Sydney with some authentically Australian music playing in the background?

Green Day - Wake Me Up When September Ends YouTube
Again this track reflects the current limitations of my CD collection, but in the very least it is pretty topical, and Green Day must be given plaudits for somehow remaining “cool” for over 15 years.

Augie March - Watch Me Disappear
The title track from Augie March’s forthcoming fourth album, which will be released on October 11th. One of my favourite bands, and I am looking forward to seeing them live again in either Sydney or Melbourne. Tour dates here. You can hear two tracks from the new album from their MySpace page.

Manic Street Preachers - Your Love Alone Is Not Enough YouTube
Another highlight of the Hydro Connect Festival, the Manics have had a mixed record in recent years, but there is certainly something to like about this single from their latest album.