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Tag Archives: Commission of Audit

Transfield shares go up and so does the debt

LABOR CRASHES THROUGH PREVIOUS DEBT LIMIT TOPPING QUARTER OF A TRILLION DOLLARS

October 12, 2012

Joint Media Statement: Andrew Robb and Joe Hockey

The Gillard Government has driven up Australia’s credit card to a record $256.4 billion according to latest Australian Office of Financial Management (AOFM) figures.

The previous debt ceiling of $250 billion was raised by Labor to $300 billion in the May budget further confirming its inability to curb its debt addiction.

Shadow Treasurer Joe Hockey, in a Liberal Party eNewsletter 27 July 2013, comments on the ALP’s “debt” TV commercial:

Kevin Rudd and Labor have increased Australia’s debt limit from $75 billion, to $200 billion, to $250 billion and now to $300 billion. The Treasury has told us that debt will hit $290 billion by Christmas, just $10 billion shy of the current legislated limit.

Only the Coalition will get the Budget back into the black, start to pay down Labor’s debt, and implement our economic Plan to grow the economy and create jobs.

Australians can’t afford another three years of Labor’s reckless spending.

Debt is certain to exceed $425 billion by Christmas

As at last Friday, 28 August 2015, gross government debt was $384.7 billion – the highest level ever recorded. This represents an increase of $111 billion from the level inherited by the Abbott government in September 2013. It is just as well Treasurer Joe Hockey scrapped the debt ceiling legislation early in the Abbott government’s term because he would now be having to introduce legislation to have the ceiling raised beyond $400 billion, a figure that will be exceeded before year end.

With the gross debt increasing by over $1 billion per week under the Abbott government, we have seen funding slashed to health, education, Indigenous Affairs, countless NGOs and charities, the CSIRO, the ABC, the NBN, and many other crucial areas.

We have seen the superannuation guarantee rise put on hold and the low income co-contribution abandoned. I’m not sure if axing the schoolkids bonus has passed yet. Family Benefit, after being reduced, is now being dangled as a sweetener again. Getting rid of the carbon and mining taxes cost low income earners in various different ways. Thousands of public service jobs have gone, as have many more in manufacturing and mining

So what have we got for the increased spending?

Plenty of money for defence and national security.

Since its election, the Government has invested more than $22 billion in Defence capability projects. The Government will provide Defence with $31.9 billion in 2015–16 and $132.6 billion over the Forward Estimates. This is an increase of $9.9 billion over the Forward Estimates when compared to the 2014–15 Budget and represents record expenditure on Defence.

Apparently Border Force is to have 6,000 officers. Taxi drivers beware! Perhaps some of those retrenched public servants could apply, provided they are willing to wear a black uniform, take an oath, use force, and fire a gun.

And lots of money for offshore detention.

Transfield has been providing services on Nauru, which has 637 asylum seekers, since September 2012, and on Manus Island since early 2014. Its existing $2.2 billion contract with the Department of Immigration for both centres will expire on October 31. Despite the many incidents and reports criticising the running of the detention camps, Transfield has just been awarded a further five year contract. The announcement saw Transfield shares rise by 9%.

Tony Shepherd, the head of Abbott’s Commission of Audit, was chairman of Transfield and had spent over a decade on the board, quitting only in October 2013 to take up the job as Commissioner.

Mr Shepherd left with more than 200,000 Transfield shares, allocated to his family superannuation fund, on top of his final salary of $380,000.

In a move strikingly similar to Dyson Heydon judging himself, Treasurer Joe Hockey and Finance Minister Mathias Cormann left it up to the audit commissioners to rule on potential conflicts of interest among themselves.

Shepherd now heads the WestConnex Delivery Authority which will award contracts to build the proposed Sydney toll road, co-funded by the Abbott government. He is also a director of the international arm of Virgin Australia.

Not that I am suggesting anything untoward in this tight knit circle.

“Mates help each other, they do not tax each other.” – Tony Abbott, February 23, 2011.

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This is the Dawning of the Age of Consultancy

Before the election the Coalition announced a series of inquiries, reviews and white papers that it would instigate if it were elected. They included:

  1. Commission of Audit
  2. Inquiry into the Financial Sector
  3. Review of Competition Policy
  4. Judicial Inquiry – Home Insulation Programme
  5. Review of the Department of Defence
  6. Coal Seam Gas Management and Wind Farms
  7. Inquiries into the National Broadband Network – The Coalition will conduct three inquiries as part of its “Plan for a Better NBN”.
  8. Inquiry into the Australian Tax Office

Productivity Commission Inquiries and Reviews

  1. Inquiry into Child Care Funding
  2. Review of Industrial Relations
  3. Review of the Automotive Industry

White Papers

The Coalition will produce White Papers on the following:

  1. Tax Reform
  2. Direct Action Plan
  3. Federal-State Relations
  4. Defence
  5. Development of Northern Australia
  6. Resources and Energy

Since the election, that list has grown.

Sussan Ley was up and running, commissioning a report from PriceWaterhouseCoopers into child care funding. Apparently she couldn’t wait for the results from the inquiry that the Productivity Commission was already conducting

Coincidentally, the North Sydney Forum, a campaign fundraising body for Joe Hockey whose $22,000 annual membership fee is rewarded with “VIP” meetings with Mr Hockey, was established in 2009, shortly after Joe became shadow treasurer, by Joseph Carrozzi, managing partner at professional services firm PriceWaterhouseCoopers.

Mr Carrozzi is also chairman of the Italian Chamber of Commerce and Industry in Australia and was a board member of the organisation when Nick Di Girolamo was its chairman.

Members of the forum include National Australia Bank as well as the influential Financial Services Council, whose chief executive is former NSW Liberal leader John Brogden.

The FSC’s members, including financial advice and funds management firms, stand to benefit from the changes to the Future of Financial Advice (FOFA) laws. The National Australia Bank would also benefit from the changes.

The chairman of the North Sydney Forum is John Hart, who is also the chief executive of Restaurant and Catering Australia – a hospitality industry lobby group whose members stand to benefit from a government-ordered Productivity Commission review of the Fair Work Act that is expected to examine the issue of penalty rates.

Mr Hart also sits on Prime Minister Tony Abbott’s Business Advisory Council.

The National Commission of Audit was officially announced by Treasurer Joe Hockey, and Finance Minister Senator Mathias Cormann, on October 22, 2013, to be led by Tony Shepherd, former Business Council of Australia president and chairman of Transfield Services.

Mr Shepherd’s appointment was seen as being particularly controversial because as head of the BCA he had been critical of the previous Labor government policies such as the National Disability Insurance Scheme and the Gonski schools funding reforms.

His appointment was also questioned because of his links to companies that had benefited from government contracts.

Mr Shepherd stepped down as chairman of Transfield Services upon his elevation to the Commission of Audit. Transfield, a construction and services firm, won a string of contracts in recent years worth hundreds of millions of dollars, including the contract for maintenance and support services at the Nauru detention centre.

The other commissioners are former senator and minister in the Howard government, Amanda Vanstone, and former senior public servants Peter Boxall, Tony Cole and Robert Fisher.

The coalition predicted in its midyear Budget update that the commission would spend about $1 million but figures show it cost taxpayers about $2.5 million to produce the audit. That’s a 150% budget blowout from the panel advising us how to “live within our means”.

It cost $1.9 million for expert staff drafted in from the departments of Finance, Treasury and the Prime Minister and Cabinet to work on the study.

The head of the commission’s secretariat, Peter Crone, was paid $157,000 to oversee the probe, while the commissioners were paid $85,000 each for their five months work.

Consultants Boston Consulting Group were paid $50,000.

And then there’s the NBN.

As the rollout of superfast broadband slows down across the country, consultants have been the biggest winners, pocketing millions of dollars from numerous reviews and cost-benefit analyses.

A Question on Notice tabled in Federal Parliament revealed the external consulting cost for the NBN was $10.1 million. The cost of implementing the recommendations was not included, the 2016 deadline has been abandoned, and the new agreement with Telstra is yet to be concluded.

Boston Consulting Group, KordaMentha and Deloitte Touche Tohmatsu received the biggest financial boon from the government-commissioned reviews.

Then there are the Royal Commissions.

The Government will provide $53.3 million over two years (including $5.3 million in capital funding) to conduct the Royal Commission into Trade Union Governance and Corruption.

The cost of this measure will be offset by redirecting funding from the Employment, Industry and Infrastructure and Regional Development portfolios.

Even though there have been coronial enquiries, inquests, administrative investigations and a full government audit report into the Home Insulation Programme’s problems, Abbott found another $25 million for a Royal Commission.

We then have the Warburton led review into the Renewable Energy Target. The Climate Change Authority was legislated to conduct this review, which they will still do to “keep them occupied” according to Greg Hunt. To get the results he wanted, he chose to conduct his own review led by climate change sceptic Dick Warburton and representatives of fossil fuel producers and users.

A Senate Committee was told the total cost of the review was $587,329. That figure does not include the salaries of the staff on the secretariat or overheads such as IT and accommodation.

Mr Warburton received fees in the order of $73,000; Mr Fisher $39,900; Ms In’t Veld, $43,900; and Mr Zema, $29,700.

Clean energy representatives were shocked by the panel’s appointment as chief advisor and modeller of ACIL Allen, a consultancy seen as close to the fossil fuel industry, and whose highly contested research formed the basis of the coal industry’s attempts to dismantle the RET in 2012.

They refused to include in their modelling the benefits of renewable energy – including the health benefits, job benefits, and the network benefits – which the panel dismissed as “too hard to model” and little more than a “transfer of wealth”, presumably away from the coal generators and network providers.

ACIL Allen were paid $287,468 for their modelling

We also have seen Christopher Pyne’s National Curriculum Review which cost $283,157 to tell us we need less Indigenous focus and more Judeo-Christian, less creativity and more rote learning, and less about progressive reform and more about business.

Kevin Donnelly and Ken Wiltshire appointed 16 external experts to make contributions, including Barry Spurr, each of whom were paid $8250 for their reports.

This government’s intentions are clear. They have bypassed government departments and statutory bodies, ignored expert advice and the results of previous reviews, to pay hundreds of millions to consultants, vested interests, and party hacks to produce the results that endorse their stated policies or that damage the previous government.

This is indeed the Age of Consultancy.

 

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Honesty … what’s that?

When the Charter of Budget Honesty was introduced by the Howard/Costello government in 1998 it was intended to provide a framework for the conduct of Government fiscal policy.

“The purpose of the Charter is to improve fiscal policy outcomes. The Charter provides for this by requiring fiscal strategy to be based on principles of sound fiscal management and by facilitating public scrutiny of fiscal policy and performance.”

Broadly speaking, the Charter requires that budgets must be in balance over the course of the economic cycle, which means the government can run a deficit in bad times as long as there’s a surplus in good times. But, as Alan Kohler points out, the problem was it didn’t say how big these should be.

Stephen Anthony of Macroeconomics wrote in a report he did for the Minerals Council of Australia last year:

“Essentially, the fiscal strategy objective (of the Charter) provided the wrong diagnostic tool as a benchmark for success over the business and commodity cycle. As a result, governments spent up big in the boom and got caught on the down side of the cycle. Windfall tax receipts were frittered away.”

According to Macroeconomics, commodity boom windfall revenues contributed around $160 billion to the Commonwealth budget bottom-line up to 2011-12. Yet all that the fiscal strategy required was for the government to run a surplus – of any size.

Because the resources boom led to unexpected returns, there was no danger of being in deficit. Add to this the sale of many assets and there was a motza to play with. The Charter was still adhered to despite a huge spending spree.

The last five budgets of the Howard government contained net discretionary spending of $133 billion and net tax cuts of $117 billion. The structural deficit was set up by John Howard and Peter Costello and not corrected by Kevin Rudd, Julia Gillard and Wayne Swan.

Prior to the 2010 election, Chris Berg of the IPA (and ABC) wrote an article bemoaning the leaking of the then Opposition policy costings.

The Charter allows the opposition to give Treasury its election promises to check the policy costs are correct. If they don’t, the government clobbers them for avoiding scrutiny. Hockey’s figures were subsequently found to have an $11 billion black hole, and the auditors found guilty of professional misconduct. No wonder they didn’t want them released early.

Berg suggested that this part of the charter overwhelmingly favours incumbent governments because they:

“have had three years to consult with Treasury’s nearly 1000 staff about future policies, test policy assumptions, and get Treasury’s recommendations. Much government policy is formulated by Treasury in the first place. By comparison, an opposition is just a few people in a room thinking up ideas.”

From what we have seen of the Abbott government so far, they haven’t expanded their consultative capacity regardless of how many expert public servants are at their disposal and they will sack or ignore anyone who offers advice they don’t want to hear.

In 2004, Ross Gittins wrote ”The government is largely feeding back to the bureaucrats their own costings, whereas the opposition runs a high risk of slipping up somehow and being monstered by the Treasurer.”

To address this problem, in 2012 Labor established the Parliamentary Budget Office.

“The role of the PBO is to inform the Parliament by providing independent and non-partisan analysis of the budget cycle, fiscal policy and the financial implications of proposals.

As set out in the Parliamentary Service Act 1999, the Parliamentary Budget Officer has the following functions:

•Outside the caretaker period for a general election – to prepare policy costings on request by Senators and Members of the House of Representative, with the requests and the PBO’s responses to be kept confidential if so requested by the requestor.

•During the caretaker period for a general election – to prepare costings of publicly announced polices on request by authorised members of Parliamentary parties or independent members.

•To prepare responses (other than policy costings) to requests relating to the budget by Senators or Members of the House of Representatives.

•To prepare submissions to inquiries of Parliamentary committees on request by such committees.

•To conduct research and analysis of the budget and fiscal policy settings.”

One would have thought that the Charter and the PBO would have helped towards keeping the bastards honest but no, both sides still play silly buggers. They are under no compulsion to release costings by a set date and we have been subjected to the debacle of giving interested voters only a day or two to digest the material on many crucial policies. Others, like the NBN or Direct Action, are unable to be costed either due to lack of technical expertise or lack of policy detail. The PPL was based on rubbery assumptions which made the confidence level very low.

And then we have the manipulative approach to reporting that Joe Hockey sells to naïve voters. He pulled some pre-election stunts by using accrual rather than the accepted cash basis.

Image from facebook.com

Image from facebook.com

“Mr Hockey today admitted to using the accrual rather than cash bottom line for their numbers – which makes any figures Mr Hockey produces look much rosier than they actually are. The difference between cash and accrual bottom lines across the forward estimates is $16.6 billion. Were Federal Labor to use an accrual bottom line, it would be in surplus a year earlier, in 2015-16. What this means is that Australians will never truly know the state of the budget under an Coalition Government.”

And now, rather than using the independent PEFO as the true state of the inherited debt and forecast for the future, Hockey is using his propaganda sheet MYEFO, which included his revenue and discretionary spending decisions, as the starting point for comparison of how the government is performing fiscally. MYEFO is effectively saying that, under Coalition policies and spending commitments as they stood in December 2013, the gross debt in ten years’ time would be $667 billion. He then somehow sells that as Labor’s fault. I would love to see the same analysis done to the Howard government – what the debt would have been in ten years if his spending continued unabated. Using actual net debt when referring to the Coalition and projected gross debt when talking about Labor is blatantly designed to misinform.

It was interesting to read in the recent Commission of Audit that they recommend the transparency and rules about fiscal statements need to be tightened up.

“Budget transparency allows for a more informed public policy debate, fosters credibility and helps the community better understand fiscal policy. Improved fiscal transparency can assist in highlighting current and emerging fiscal risks, and in driving the necessary change in the community’s expectations of government.

Improved budget reporting requirements would improve transparency and accountability and assist the government in achieving its medium‑term fiscal strategy.”

They also take a veiled shot at Hockey’s forecasts and express their confidence in Treasury figures.

“Recent budget documents have reported large downward revisions to the economic and revenue forecasts. Against this backdrop, a number of concerns have been raised about the transparency of current forecasting arrangements.

The Review of Treasury Macroeconomic and Revenue Forecasting (Australian Government, 2012) found that ‘Treasury’s forecasts are comparable with, or better than, those of official agencies overseas’.”

The report goes on to recommend some changes.

“One option for Treasury to improve the transparency of budget forecasts would be to require a further formal consultation with a panel of experts before budget forecasts are finalised.

Another option which improves transparency about how the Budget forecasts compare with the views of other forecasters could be achieved by requiring comparisons to be published between key economic forecasts and relevant consensus forecasts.

Confidence intervals could also be published for key forecasts.”

All I can say is good luck with that!

I am expecting General Jim Molan (retired) to be brought out of mothballs (if anyone can find him since he was given $1 million to be our ‘Special Envoy’ smashing the people smuggling business) and given Martin Parkinson’s job at Treasury. Launch Operation Bamboozle where, in the national interest, they will no longer be giving the financial bandits a regular update on fiscal matters.

“The repair job started from day one obviously with the election of the new government but it accelerates from today given that we will see the full extent of Labor’s debt and deficit disaster.” – Tony Abbott, December 2013

MATHIAS CORMANN: “Labor left behind a debt and deficit disaster after completely mismanaging public money over six years in government. We are taking responsibility to fixing up the mess they left behind.” July 16 2014

Joe Hockey: “There’s no crisis at all in the Australian economy,” July 26 2014

Honesty … what’s that?

 

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Talk about stubborn!

Yesterday I heard Joe Hockey interviewed. When asked about Tony’s pet Paid Parental Leave Scheme he had the unmitigated gall to say that Labor hates paid parental leave. Does he forget that it was Labor that brought in our first PPL on January 1 2011? Does he forget Abbott’s history on this issue?

In 2002, Tony Abbott’s hostility to paid parental leave reached a crescendo, when he declared to the press: “Compulsory paid maternity leave? Over this Government’s dead body, frankly.”

Writing for The Australian in October 2008, he claimed that paid parental leave – like abortion – was part of a “radical women’s agenda” championed by extreme feminists in the Labor movement. He spoke out about his opposition to the scheme based on the ways it reduced stay at home mothers to second class citizens, lambasting then Prime Minister Rudd’s commitment to women workers as an example of “Political Correctness”; extreme lip-service to the feminists in Labor ranks.

In 2009 a Productivity Commission Report stated :

“Payment at a flat rate would mean that the labour supply effects would be greatest for lower income, less skilled women — precisely those who are most responsive to wage subsidies and who are least likely to have privately negotiated paid parental leave. Full replacement wages for highly educated, well paid women would be very costly for taxpayers and, given their high level of attachment to the labour force and a high level of private provision of paid parental leave, would have few incremental labour supply benefits.”

Despite this advice, in 2010 “Mr Abbott first announced his paid parental leave after he emerged from a luncheon event on International Women’s Day. The scheme would pay new mothers their regular wage for six months, up to a maximum of $75,000, and is to be funded by a 1.5 per cent levy on more than 3000 big companies.”

On May 6 2013, Malcolm Turnbull refused to comment when asked if he thought there should be a review into the scheme.

“I’ve said again I am not going to comment on whether it should be reviewed or not. I don’t believe there is any need to review it. I think it has been very carefully costed by Joe Hockey and Andrew Robb so it is certainly in the policy budget envelope but any further deliberations on that or any other policy is obviously something we do in the four walls of shadow cabinet,” Mr Turnbull said.

“This is a key policy of Tony Abbott’s and it is something that we have as part of our policy and I don’t see any probability or likelihood that of that policy being shelved. Tony is very committed to it.”

The next day we hear a little more about Tony’s rationale of wanting women of calibre to breed.

TONY Abbott’s expensive paid parental leave scheme is “all about” encouraging women of “calibre” to have children, the Opposition Leader said today.

“We do not educate women to higher degree level to deny them a career,” he said.

“If we want women of that calibre to have families, and we should, well we have to give them a fair dinkum chance to do so. That is what this scheme of paid parental leave is all about.”

On that same day

Internal dissent about the policy went public this morning, with federal Liberal backbencher Alex Hawke calling it an “albatross” that must be “scrapped”.

Writing for the Institute of Public Affairs backbencher Alex Hawke blasted it as an “unjustifiable impost on business” and said the policy should be reviewed.

“An expansion of the PPL scheme is ill-suited to an economically Liberal agenda,” Mr Hawke wrote.

“Most importantly for Australians, the policy does not pass the fair-go test.”

“Now would be a very good time to revisit this policy with a view to scrapping it before the next election, so we can go to the election without this albatross around the neck of the party,” he said.

In June 2013, when asked to guarantee Tony Abbott’s “signature policy”, Mr Hockey responded: “You will see our initiative in that regard prior to the election…I’m not going to get into speculating about where we’re at.”

The following month, big business and the IPA added their criticism of the scheme.

LABOR is on its own believing a parental leave plan should be paid at “welfare” rates rather than a worker’s real wage, Opposition Leader Tony Abbott says.

But that’s not quite true. Big business joined critics of Mr Abbott’s signature paid parental leave scheme as Coalition MPs prepare to pressure their leader to modify it.

Mr Abbott’s predicament has been summed up by a shadow minister: “There’s only one vote for it in the party room.”

It is one of the most generous proposals in the world but the cost, the need for a tax increase, and the lack of consultation has turned some Liberal MPs against it.

Business is also fighting the plan with the head of the Australian Industry Group, Innes Willox Monday night saying: “There are no positives, no upsides in this policy that we can see for business.

“It’s inequitable,” Mr Innes told ABC TV.

“Only the top 3000 or so companies would be paying and they’d be subsidising for everyone else. That doesn’t make sense on that level.

‘”The current system is operating well. It has very broad business and community support. We don’t see any reason to change.”

John Roskam of the economically dry Institute for Public Affairs said “There’s widespread concern that the Coalition is supporting a tax increase. And at this time, the Coalition should be talking about cutting taxes and cutting spending, not increasing taxes.”

More recently we have had the commission of audit and the Productivity Commission (again) suggesting the money would be better spent on childcare.

May 1 2014

The commission (of audit) also wants Mr Abbott’s generous paid parental leave scheme wound back and the money directed into a streamlined childcare support mechanism. Paid parental leave wage replacement should be capped to average weekly earnings – $57,460 a year, much less than the current proposal of $100,000. The savings should be used to offset the cost of expanded childcare assistance.

July 22 2014

The Coalition has dismissed a Productivity Commission suggestion that funds be redirected away from Tony Abbott’s paid parental scheme and into childcare services, arguing that the two are “separate things”.

On a government website there is an article titled Comparing the Paid Parental Leave Schemes. It states

The designs of both the current and Coalition/Greens schemes contain elements that make them as much like an Australian Government welfare payment as they are workplace entitlements. For example, rather than being funded and run privately by employers or funded (as occurs in most OECD countries) through a social insurance scheme, they are:

•fully or substantially funded from taxation revenue and

•fully or substantially administered by the Department of Human Services.

Critics of both the Coalition and Greens schemes have tended to argue that PPL should better reflect the existing framework of Australia’s welfare payment system, based around targeting flat rates of payment at those most in need. As the Henry Tax Review noted, ‘the primary purpose of government assistance payments to individuals is to provide them with a minimum adequate standard of living’. A further value underlying the Australian system is that there should be incentives for private provision, with the benefit system seen more as a safety net.

The government argues that their scheme aims at gender equity and workforce participation. This is hard to sell when you look at the guys and doll that form their cabinet and the reports from the PC and commission of audit suggesting affordable, flexible, quality childcare is far more important.

Despite a so-called budget emergency and criticism from every direction, regardless of advice from every expert review, unheeding of internal dissent, Tony forges ahead with his “I like women and women like me” campaign. Does Tony really believe that he knows better than all experts on every matter? It’s all just a political game for him and he increasingly shows he has no idea how to prioritise.

Abbott’s signature policy may be something to aspire to in the future but he is signing the cheque with money slashed from those most in need. This mantra of “we took it to the election” won’t wash in light of all your other broken promises from your infamous “no cuts” speech. Give it up Tony!

Failed plans should not be interpreted as a failed vision. Visions don’t change, they are only refined. Plans rarely stay the same, and are scrapped or adjusted as needed. Be stubborn about the vision, but flexible with your plan.

-John C. Maxwell

 

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The laws by Shepherd, he shall not want

The AIMN is often criticised for its claim of being an independent information alternative. I assume the criticism comes because most articles and comments tend towards progressive social justice and philosophy.

The definition of independent is “free from outside control; not subject to another’s authority; not depending on another for livelihood or subsistence.” I am not a member of any political organisation or union. Nobody tells me what to write and nobody checks it before I publish it. I am not paid to write. I therefore defend our claim to independence but cannot do the same for the head of our supposedly independent Commission of Audit, Tony Shepherd.

As head of the Business Council of Australia, Shepherd advocates for Australia’s 100 biggest companies, and was chairman of construction and services giant Transfield Services until he quit in October after more than a decade on the board.

Transfield has secured hundreds of millions of dollars in federal government contracts in recent years, including reaping $180 million from operating detention facilities on Nauru. In February we learned that Transfield Services will be paid $1.22 billion by the Australia government to run both offshore detention centres

Mr Shepherd left with more than 200,000 Transfield shares, allocated to his family superannuation fund, on top of his final salary of $380,000.

Mr Shepherd’s Commission of Audit was tasked with looking at possible cuts to the ABC and SBS. Considering he is an advocate for pay TV providers in his position as chairman of the Australian Subscription Television and Radio Association (ASTRA), this is surely a huge conflict of interest. The group, whose members include Telstra, Foxtel and ESPN, in January issued an invitation to a party at Parliament House in Canberra.

”Tony Shepherd AO, chairman, ASTRA, invites you to join the leaders and stars of Australian subscription television to celebrate the quality, creativity and diversity of content watched by 7 million Australians,” it said.

Shepherd is also a director of the international arm of Virgin Australia and heads the WestConnex Delivery Authority which will award contracts to build the proposed Sydney toll road, co-funded by the Abbott government. The WestConnex is at an early stage in Infrastructure Australia’s four stage priority list. Its Benefit Cost Ratio is thought by many observers to be negative.

In October last year, more than 100 people gathered at Leichhardt Town Hall to hear public transport experts Michelle Zeibots and Gavin Gatenby point out the many flaws in the shaky case for Australia’s most expensive infrastructure project.

This led to Leichardt Council presenting a Notice of Motion stating:

“The WestConnex is a very bad transport plan. In fact it is not a transport plan at all it is just a very long, very expensive private road. It will generated very high carbon emissions in both construction and use and it will force people off public transport and back into their cars.

It is also has a very bad urban development plan which has been conveniently linked to the private tollway plan.

It would appear that the government is somewhat opportunistically seeking to imply that high rise development along the route of a private tollway somehow equates with encouraging higher density development near public transport hubs. There is no logic to this at all only a hungry grab for land for developers. This is not the future that Leichhardt Council and her residents and local businesses aspire to. The “WestConnex Revitalisation Land Use Planning”, should it go ahead will destroy the Leichhardt we know and love.”

It would be interesting to see who is buying up land in that area.

WestConnex is the biggest urban infrastructure project in the country – with $3.3 billion of taxpayers’ money already committed to it – and hardly anything is known about it.

Taxpayers do not know how many cars are expected to use this motorway. They do not know its estimated impact on local roads. They are yet to be told its precise route. They’re in the dark on construction methods. Even the need for the WestConnex is not known.

WestConnex is really a connection of three motorway projects the NSW government says will cost about $11.5 billion together.

One of the three projects – the second to be built – will be another M5 East tunnel in southern Sydney and a connecting road to Sydney Airport. The state says it will be able to build this for $3.6 billion to $3.8 billion, with construction starting in 2016 and finishing in 2020.

This forecast – presented with no justification to back it up – seems vastly underestimated.

When the former NSW Labor government appealed to the federal government for funding for pretty much the same project in 2010, it put a $4.5 billion price tag on it (with inflation, that would probably be close to $6 billion by 2020). Even then the federal government’s advisor Infrastructure Australia said the $4.5 billion figure was likely to be understated.

So on what basis are Abbott and the NSW State government now so confident that they can do the job for billions less than their predecessors?

The public servant running the project to date, Paul Goldsmith, said:

”When we started the business case, we recognised this as a very difficult place to build a motorway. It’s a very expensive place to build a motorway and this is why we developed a couple of industry partners to have some input into developing solutions for that part of WestConnex. We haven’t got a fixed solution but we have a whole bunch of ideas and we’ve got some short-listed solutions to that area.”

In other words, the government is sure it can build this section of motorway for $3.8 billion but it either does not know how or will not say.

Tony Shepherd’s board of businessmen should be providing the workings, analysis and assumptions of WestConnex, in the same way they would if governments proposed massively expensive new welfare, disability, education or health programs.

Research shows us that in most industrialised cities, including Sydney, car use is declining due to fuel prices and other living pressures, while demand for public transport continues to grow. Sydney is a model example of this shift. So while Prime Minister Tony Abbott believes the ”humblest person is king in his own car”, the evidence says many of us are opting out of this 1950s mindset.

The claim that WestConnex is an integrated transport solution is also deceptive. ”Integrated” transport can be interpreted as allowing different travel modes to complement each other. A more holistic understanding implies the incorporation of social, economic and environmental elements, and policies to reduce the need for travel and the impact of journeys made.

WestConnex does neither. First, widening the M4 and M5, and building an 8.5-kilometre tunnel, does not enable private transport users to integrate walking, cycling or public transport as part of their journey. Second, it does not meet key environmental, social and economic outcomes. The government’s business case executive summary provides no insight into how WestConnex will meet environmental criteria or encourage healthier transport choices.

Perhaps that’s because building large motorways increases greenhouse gas emissions, air pollution levels, dependency on fossil fuels and inequitable access to mobility.

Choosing roads over integrated public transport options is not logical, but ideological, as shown by Abbott’s plans to abolish funding for urban rail, while promising support for WestConnex, Perth’s airport gateway road and Melbourne’s east-west link. Mike Baird’s so-called innovative financing model for the WestConnex is underpinned by this same neo-liberal ideology.

Failure by successive Labor and Liberal governments to recognise the need for affordable, reliable, efficient, integrated transport options has earned Sydney the title of the world’s fourth-worst major city for transport and infrastructure.

Public money should be spent on projects such as an integrated light rail connection up Parramatta Road and building Parramatta Council’s proposed full light rail network in western Sydney.

It is time to invest in 21st-century public transport systems that can connect communities, cut environmental impacts, and generate long-term economic success.

Considering Tony Shepherd’s many business involvements presenting a multitude of conflicts of interest, was he really the man to head the Commission of Audit? It appears to me that Tony Shepherd is recommending what is good for Tony Shepherd and the countless businesses he represents.

 

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When Is A Magic Pudding Not a Promise? When A Silver Bullet Mixes Your Metaphors.

Image by 'That's Life'

Image by ‘That’s Life’

Recently elected, Secretary of Moyhdiddy Turf Club, Mr Hoe Jockey, has released the report from the Independent review that he had commissioned from his father-in-law, Mr Point, respected businessman, Mr Lot, and the well-respected ex-mayor, Ms. Amanda Simpleton. The report has concluded that, in fact, the Moyhiddy Turf Club will not be apply to save enough ink in printing costs by simply changing its name to MTC which was one of the platforms on which Mr Jockey, and the president, Mr Tiny Habit were elected leading some people to accuse them of breaking their pre-election promise. In an exclusive interview, Mr Jockey explains to me exactly why this is wrong:

Me – So is this a broken promise?

Mr Jockey – Absolutely not. Our main promise was to get the finances of the MTC back in order and we intend to keep that one.

Me – When exactly?

Mr Jockey – Look you have to understand that the previous administration left this club in quite a mess. Even though it was clear that other clubs in the area were going broke and folding, they continued to spend and run race meetings.

Me – Yes, but your club survived and is actually doing quite well.

Mr Jockey – We’re in debt! Don’t you understand? If we’d saved money by not running any race meetings last year, we’d be much better off.

Me – But wouldn’t there be a lot of people – you know trainers, strappers, jockeys, even catering staff – who wouldn’t have a job now?

Mr Jockey – But the debt. It’s ballooned out to almost as much revenue as the club turns over in a single race meeting.

Me – Weren’t you aware of the debt before you ran for office?

Mr Jockey – Of course, we’d been warning about it for ages.

Me – So wasn’t it irresponsible to make some of those other promises? Like not sacking the course racecaller.

Mr Jockey – We didn’t like the horses he was suggesting had won – the private racecallers all thought that my horse had won. Besides, we haven’t sacked him. We’re just reviewing which part of the car park he can call the races from and whether he actually needs binoculars.

Me – Well, what about those other promises. You know, free membership, increased prizemoney, abolition of the surcharge to fix bit of the track that floods, the campaign to get the Melbourne Cup brought here and so on…

Mr Jockey – Can I just stop you here? Our absolute priority is getting the club’s finances in order.

Me – Yes, but I’m just saying that you promised all these things knowing you’d need to break them.

Mr Jockey – We’re not breaking any promises. We keeping our main promise to return our budget to surplus.

Me – And when are you planning to do that?

Mr Jockey – Sometime after the next election.

Me – So you won’t be keeping any promisess until after the next election?

Mr. Jockey – Hang on, hang on, we’ve already stopped the people camping illegally in centre of the track.

Me – Yes, but you did it by shooting at them.

Mr Jockey – We were concerned that they may drown in the swamp.

Me – Just on that, how are you going to fix the track if you remove the surcharge that was going to help in draining the swamp.

Mr Jockey – We didn’t believe that the surcharge was going to fix anything. We were going to pay the local companies not to put their polluted water in the swamp.

Me – The companies that your Independent Committee run?

Mr Jockey – I’m not sure. What are you suggesting?

Me -So what happens if that doesn’t stop the track from flooding?

Mr Jockey – We’ll just tell people not to ride on that part of the track.

Me – But isn’t fixing the track a priority? I mean, you can’t run race meetings without a track.

Mr Jockey – You can’t run race meetings with a budget that doesn’t balance.

Me – Actually you can. You just need to make sure that you have a plan for ensuring that the debt doesn’t get too big. On the other hand, your plan to make the public responsible for running their own race meetings doesn’t seem like it’ll work to me.

Mr Jockey – We support personal responsibility. The age of the committee running race meetings is over.

Me – So no apology for all the confusion you seem to be causing?

Mr Jockey – Confusion?

Me – Well, you insist that the number one promise is getting the budget in surplus, but you can’t even tell us when you’ll do that!

Mr Jockey – Let me just remind you again, we have inheritted from the previous administration an untenable black hole and I intend to fill it.

Me – I think that would be an excellent idea, but could put the rest of your colleagues in it as well?

At this point, I thought it wise to conclude the interview as Mr Jockey was muttering rather angrily.

Abbott uses society’s vulnerable as means to an ideological end

It seems to me that it’s a core conservative tradition to use the most vulnerable people in society as a means to an ideological end. There are endless current examples of this: threats to pensions, restricted access to Newstart for unemployed youth, destruction of universal healthcare, proposed reduction of the minimum wage and a cap on that wage for the next ten years, all part of the Commission of Audit’s recommendations to the Abbott government prior to its first budget in a couple of weeks.

None of these measures will affect anyone as disastrously as they will affect the poor, and while middle class journalists on a good wage, some of whom are Abbott’s most vocal supporters, scream like stuck pigs about the flagged “debt levy” on incomes over $80,000, nobody much is pointing out the ideologically-based, systematic crippling of the lives of those who struggle hardest to keep poverty from their doors.

Conservatives seem to hold the ideological position that poverty is a moral failing, for which the individual is solely accountable, and if that individual has been incapable of taking care of her or himself and his or her family, they’ve no one to blame but themselves. If they do sink into a morass of underprivileged misery then they ought to be able to find ways to redeem themselves. If they don’t manage this feat, they obviously only deserve what little they get, and the conservative will do his or her best to take even that away.

This unexamined belief that the less financially fortunate are immoral and a drain on the prudent is, it seems, impossible to eradicate from the consciousness of the privileged and entitled, who lack any ability to comprehend context, and the myriad forces at work in society that affect the course of a life. This, coupled with the conservatives’ traditional love of a good clichéd stereotype, works to reinforce their sense of entitlement, and their contempt for anyone less blessed than are they.

The conservative disregard, some may even allege contempt, for those other than (lesser than) themselves, allows them to use rational agents as a means to an end, contradicting the Kantian position that to use others as a means, and not an end in themselves, is to flout the fundamental principle of morality. Perhaps this is nowhere as starkly obvious as in the current and previous governments’ treatment of asylum seekers. Both major political parties have, for many years now, used boat arrivals as a means to achieve political success, and not as rational agents deserving of consideration as ends in themselves. In this sense, the ALP finds itself on the same side as conservative politicians, something that should chill the heart of any ALP supporter.

There is no point in decrying the lack of humanity and compassion in conservative ideology. Both qualities are regarded as belonging to the bleeding hearts of the left, hindrances to freedom, obstacles to profit. So we find ourselves in the bizarre position of having a Human Rights Commissioner for Freedom, Tim Wilson, who recently claimed that McDonalds has “human rights to own property” and that “spending” is an expression of free speech.

It’s a dangerous situation when a Commissioner for Human Rights equates the ability to spend with the right to freedom of any kind, including speech.

It makes no sense to take any measures that prevent or discourage people from taking care of their health, such as co-payments for doctor visits for example. This will increase the pressure on accident and emergency departments, already stretched beyond their means, and result in people becoming chronically ill, at much greater expense to the taxpayer.

It makes no sense to continue to spend billions of dollars incarcerating a few thousand asylum seekers, for example, when there are many less expensive options such as allowing refugees to live in, work, and contribute to the community.

It makes no sense to waste billions on a paid parental leave system when the money could be much better invested in increased child care for parents who want to work, but find it difficult to access adequate care for their offspring. Good child care is also an investment in our future: children can benefit enormously from early education and socialisation, a child care centre doesn’t simply “mind” them, it educates them.

However, none of the above is of any consequence to a political party driven by ideology. Humans are, to such a party, a means to an ideological end, not an end in themselves. Obviously, it is much easier to treat the less financially blessed as a means to an end, and if you already believe poverty and disadvantage to be indicators of lack of morality and worth, why would you care anyway?

You may not agree with Kant’s categorical imperative, but there is something very dark about the Abbott government’s willingness to impose harsh circumstances on those already doing without in this wealthy country. It is easy, Mr Abbott, to make life more difficult for those without the power to protest. It is more of a challenge to work towards an equitable society based not on ideology, but common sense, and respect for everyone’s humanity.

Note: It’s with my tongue firmly in my cheek that I used the conservative image of Jesus.

 

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What does Clive Palmer want?

The first Joe Hockey budget is about to be presented to parliament and to the people. There has been plenty of speculation about cuts to pensions and introducing Medicare co-payments, but it would still take a brave journalist to try and pre-empt what it will really contain. However, if any of the language being used both by Hockey and other ministers is close to the mark, it seems this government will dodge what is really needed. The one unknown they will have to contend with is Clive Palmer and his senate team. Will Clive roll over and wave the bills through the senate or will he make Abbott and Hockey sweat? Labor would do well to take a much closer look at this interesting development in the Australian political setting. Is it possible that the Palmer United Party isn’t all that concerned about the carbon tax and the mining tax and will not support its repeal? It’s possible.

While there is ample room for Hockey to cut some wasteful programs put in place by the Howard government, the real problem is falling revenue. And that means increasing taxes across the board. It also means NOT removing them, as in the case of the carbon tax and the mining tax. It means dumping election policy commitments such as Direct Action and the Paid Parental Leave Scheme. But is any of this likely to happen?

All the signs at the moment suggest not. Rather than upset their own constituency too early in the piece they will, I suspect, hit the broader community, the aged, the disadvantaged, the unhealthy, students and families; those areas where they think traditional Labor supporters most likely nest. That is their usual form. Apart from a brief period when the Howard government had shiploads of money coming in and looked like losing the 2004 and 2007 elections did they shower money on the very areas they will now attack to balance the budget. All the speculation and the rhetoric point us in this direction. Yet all of this could be avoided if they were to concentrate their efforts on the other side of the ledger, i.e. revenue. There are plenty of opportunities to raise additional revenue from increased personal tax to the GST to diesel fuel excise, but that means breaking election promises.

In the meantime Clive Palmer’s success at elections has opened up the possibility of a new dimension to his political aims, whatever they were or are now. His recent comments and his Northern Territory coup d’état suggest he is more interested in appealing to the broader electorate than furthering his own business interests. He opposes any cuts to pensions and has ridiculed the Coalition’s Direct Action approach to climate change. He also has a keen eye on the Victorian State election in November this year. All indications are that Labor will regain office after four years of Liberal mismanagement and disunity. A good showing for the PUP in Victoria could convince him that his political ambitions weren’t misplaced and that the next federal election could bring even more influence in the running of the country. To that end he would likely be persuaded to appeal to a broader base across the country.

The Commission of Audit has done its job and we should know its recommendations this week. In an atmosphere strikingly similar to the Henry Tax Report, Hockey will likely cherry pick the items that best suit the Coalition mindset. Much will be made of what is perceived as broken promises and the spin doctors will tell us otherwise. They will try to avoid another Gonski debacle. This time they will use well crafted language to justify their decisions. But the electorate will see through it anyway. And this time, Abbott and Hockey will also have to contend with Clive.

I suspect Tony Abbott and Joe Hockey are asking the question: What does Clive really want? It deserves more thought than most journalists are giving it. We only have to recall the success Don Chipp and his Australian Democrats had with disaffected voters in the eighties and nineties. There is a similar feeling in the air today and I think Clive Palmer has sensed it. Politics is an infectious animal. Popularity can be an alluring, beckoning charmer. Power is a far greater aphrodisiac than personal success and the timing couldn’t be better. I suspect the electorate is already well and truly over Tony Abbott. His leadership credentials just don’t stack up. There were similar thoughts about Malcolm Fraser in the late seventies. That prompted Don Chipp to make his move. His ‘keep the bastards honest’ campaign resonated well with disaffected liberals who then split their preferences equally between The Coalition and Labor. It could happen again. We know from similar past forays that the Palmer United Party probably won’t last. The DLP, the Democrats and One Nation are a testament to that. But for the time they are here they can wield enormous influence in the short term.

Joe Hockey’s management of the economy is the key. If he stuffs up as John Howard did when he was treasurer in the Fraser government, the Coalition will be in deep trouble with no small contribution from Clive Palmer. History has a way of repeating itself when no one pays attention to what is really happening.

 

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The power of congregations

gosford anglican churchIt has long been my view that the potential and resources of the church are largely wasted on worship.

There are few institutions with the power to influence fundamental change – governments, unions, the military, big corporations, and the church. This government is undermining the unions, using the military for civil operations, and paving the way for big corporations. Globally, we see the military and corporations wielding power in different states. In times like these, as in other times of crisis, the church needs to step up and use its power to remind the world of its responsibilities.

Despite the falling numbers in church attendance, and the growing number of people who identify as having no religion, there are positive signs of this happening.

Pope Francis is speaking out about poverty, income inequality, the economy, climate change and homosexuality, whilst adopting a much humbler lifestyle and encouraging his clergy to do the same.

“In this context, some people continue to defend trickle-down theories which assume that economic growth, encouraged by a free market, will inevitably succeed in bringing about greater justice and inclusiveness in the world. This opinion, which has never been confirmed by the facts, expresses a crude and naïve trust in the goodness of those wielding economic power and in the sacralized workings of the prevailing economic system. … Almost without being aware of it, we end up being incapable of feeling compassion at the outcry of the poor, weeping for other people’s pain, and feeling a need to help them, as though all this were someone else’s responsibility and not our own. The culture of prosperity deadens us …”

Caritas Australia has added its voice to other groups protesting against the Federal Government’s cuts of $650 million from Australia’s official aid program in the 2013-14 financial year to direct the money into Tony’s “roads of the 21st century”.

The Australian Christian Lobby also expressed disappointment at the funding cuts, announced on January 18.

Caritas Australia chief executive officer Paul O’Callaghan said it was “unfortunate such a decision had been made in the first year of our partnership with the new government”.

He said the generosity of the Australian public, bolstered by Caritas’ 40-year partnership with the Australian Government, had led to beneficial change in many countries.

“In the last year alone, this partnership enabled Caritas Australia to reach more than 1.1 million people across 20 countries,” Mr O’Callaghan said.

Other organisations such as Care, Save the Children, ChildFund, Plan International and the Fred Hollows Foundation – who also have partnership agreements with the Government – have had their funding cut by about eight per cent.

Churches are not only speaking out against cuts to foreign aid and charities, some are also making conscience investment decisions.

Resolutions passed by the NSW/ACT Synod of the Uniting Church in April show that it is possible for religious institutions to take concerted action on climate change.

The Synod resolved to divest from stocks and shares in corporations engaged in the extraction of fossil fuels, and to redirect investments into renewable energy. A second resolution, again passed by consensus, saw the Synod agree to to call upon the state government to protect important farming land, water resources and conservation areas from coal and coal seam gas mining. A third resolution, with unanimous support once again, called upon the Synod and the Assembly to speak and act pastorally as well as prophetically in the Murray-Darling Basin.

Individual churches are also making a difference. If you have not heard of Gosford Anglican Church and Father Rod then you are missing out. He organises and speaks at rallies and his signs are an internet hit. One of my favourites was “Jesus had 2 dads and he turned out ok”.

The Church has taken a stand on various hot topics of modern society, including marriage equality, asylum seekers and women’s rights.

“From a theological perspective, Jesus was on about one thing and one thing only, and that’s what he called the Kingdom of God. This Kingdom of God manifests itself in compassion and justice and true humility and there are lots of things going on in our society at the moment that aren’t about those things, like the way we treat gay people by not allowing them to be married, the way we treat our planet and the way we treat asylum seekers. These are the things Christians should be seeking – justice and compassion. We contribute to that.”

Another church that has attracted attention is the Melbourne Unitarian Peace Memorial Church.

In a bold pro-active move, the congregation thought the best possible response to the Federal Government’s Commission of Audit would be to conduct one of its own, one which they considered would put people before profit. The church raised $15,000 to commission its own Audit on behalf of the people of Australia: the People’s Commission of Audit carried out by independent public policy research organisation The Australia Institute.

They intend to release the results this month before the government releases their Commission of Audit recommendations. The comparison will be very interesting.

I would highly recommend their newsletter “The Beacon”. It is very informative on both domestic and global issues and contains excellent articles by people like refugee advocate Julian Burnside. The March edition was devoted entirely to the asylum seeker problem and is well worth a read, as are all their publications.

I am encouraged by these displays of the church taking a role in calling for change. I understand the importance of separation of church and state but, when the state is abrogating its responsibilities to humanity, then we must all join together in demanding better.

Amanda Vanstone, “Illegals” and the stampede of elephants

A few weeks ago, I talked about The Elephant in The Room in relation to the lack of women in Abbott’s Cabinet. The idea of the elephant in the room is, of course, something very obvious which nobody seems to be mentioning. Well, I’m beginning to think that before Abbott’s term is over, we’ll have such a large herd that we can start making piano keys out of ivory again.

Let’s start with Joe Hockey’s comment on Wednesday.

Well that’s because Labor created the debt. It’d be the height of hypocrisy for the Labor Party which started the fires in relation to the debt, to complain about us trying to stop the fires, to start to pay down the debt, to start to back-burn and get back to surplus.

Adam Bandt was attacked for trying to link the bushfires to climate change. Yet here we have Hockey trying to link the ALP to the fires and I haven’t noticed any criticism. Or aren’t we meant to draw any link between the NSW fires and his metaphor? Is it just an unfortunate coincidence that there happened to be bushfires and Hockey had forgotten all about it? Or was it a deliberate, pusillanimous statement from a man who now wants to distract us all from his “budget emergency” rhetoric. Back-burning? Next we’ll hear that a rise in unemployment is because the economy is doing so well that more people are seeking work!

Then we have Scott Morrison’s determination to have asylum seekers referred to as “illegals”.

Now, for just one second, I’d like to accept Scott Morrison on his word, because being a Christian, I know that he wouldn’t be deliberately lying. After al,l in this article from Misha Schubert on February 15, 2008, he declares his views on “righteousness”, which surely would mean a reluctance to lie.

“Declaring his faith was not a political agenda, he said it would, however, shape his political agenda based on values of kindness, justice and righteousness.”

The Liberals often present themselves as being tough on “law and order”. Yet apart from some time in “remand” (the detention centres), not one of these asylum seekers has been charged with a crime. Yet – we’re told – they have entered the country “illegally”. Why are they not being charged with this “crime”.

It seems strange to me. Surely, if they’ve done something illegal, there should be charges. Perhaps someone should ask Morrison about this failure of our justice system. After all, he does say his political agenda is based on justice. But he also says it’s based on kindness, so perhaps he’s just confused.

As for the committee of audit, there have been some eyes raised at the inclusion of Amanda Vanstone and querying her qualifications to be there. (She does have a column in a newspaper, and as Andrew Bolt will assure you, that makes you an expert on everything!) So let’s have a look at Vanstone’s career.

Prior to politics, she attained both Law and Arts degrees, and further qualifications in Legal Practice and a Marketing Studies Certificate, and she was as a retailer in a large department store. She ran her own business selling prints and pictures frames, before working as a legal practitioner.

As a politician, she held numerous portfolios none of which where in Treasury or Finance. But she was Minister Assisting the Prime Minister for the Status of Women. Her achievements as a minister included abolishing Aboriginal and Torres Strait Islander Commission (ATSIC). As Immigration Minister, she was showed her humane side by overturning a deportation order and granting a visa to Francesco Madafferi, in spite of alleged criminal connections, and, in spite of alleged donations to the Liberal Party from members of his family. She was twice dropped from Howard’s cabinet. But she did show her creative side in February 2007 with Under Southern Stars.

So why would Amanda Vanstone be chosen to be on the Commission of Audit? Well, when she was Minister for Family and Community Services, her opposite, Wayne Swan described her as “a political hyena who takes delight in attacking society’s most vulnerable”. And this audit commission certainly needs someone with that sort of expertise in looking at Centrelink.

As for the inclusion of Peter Boxall, you might find this quote from an interview with him which appeared in The Canberra Times in 2006 instructive:

Asked if in cutting the first deficit there was anything that caused him anguish, he says, “No. I don’t recall actually. It was quite interesting that the public service didn’t seem well prepared for it and a lot of it was driven by the new ministers.” In doing this he says they met resistance, including from central agencies. He agrees that he has wielded the knife for a fair bit of his career and, when asked if he prefers this to doling out money he says, “I would not prefer to be doling out money because I have great respect for taxpayers’ money and I don’t like supporting programs which I don’t think are good value for the taxpayer.”

I guess it reminds me of “Yes, Minister.”

Minister, two basic rules of government: Never look into anything you don’t have to. And never set up an enquiry unless you know in advance what its findings will be.’

Let me just cautiously predict the Audit Commission will recommend selling Medibank Private, Australia Post and one of two other things. It will also find that the Government needs to cut spending in some sensitive areas. It will not use the words “cut spending” preferring to talk about “eliminating waste”. Hockey will say this means that we need to be harsh in the Budget, but it’s Labor’s fault.

I also predict that the “back-burning” may get out of control.

 

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Joe Hockey and the Coalition’s Legacy

In the highly technical and confusing world of money, a balanced budget means incoming dollars (revenue) should be the same as outgoing dollars (spending). If spending exceeds revenue then either an increase in taxes, or borrowing, or drawing down on cash reserves to cover the difference, or all of the above, is needed. It’s the same as running your own household. It’s that simple or at least it should be.

So, having viewed the recent US government shutdown from a safe distance, can our Federal government see any parallels in the way they are about to approach the problem of balancing our budget? If one listens to the far right Tea Party members of the Republican Party (TEA stands for ‘Taxed Enough Already’) you will hear them constantly resurrecting their hero Ronald Reagan and preaching Reaganomics with such fervour, it’s surprising the former president is not already the Patron Saint of America. Would they be right about Reagan’s economic credentials? No. Can anyone explain why to them? No, they won’t listen. So, should we be surprised to see that in Australia, there are already signs that we are just as stupid; that we won’t learn from history either, and that our new government is foolishly travelling down the same mad road as this ultra right wing extremist body?

Tea Party members support the principle of a balanced budget. But they go a lot further than that. They don’t think spending should ever exceed revenue. Reaganomics as interpreted by the Tea Party, or the American Taliban, as ‘Will McEvoy’ of ‘The Newsroom’ called them, means less taxes and less spending. That means the government gets less of their citizens’ money and spends less on social services and infrastructure. Technically, that makes sense. The problem with that philosophy however, is twofold. Firstly, it doesn’t work and secondly, it isn’t what President Reagan did.

Like so many events throughout history, the re telling of Reagan’s economic credentials, of what he did, generates an exponential growth in embellishment, distortion and deliberate misrepresentation as one side or the other quotes what they think they know when trying to win a few points. Reagan did reduce taxes in 1981 the first year of his presidency, but over the next seven years he raised taxes, particularly on incomes below $50000. He did this no fewer than eleven times, either directly or by closing tax loopholes and limiting allowable tax deductions. During this same period he reduced corporate taxes but did not reduce spending, rather he increased it, particularly in the area of defence. His administration was thus forced to borrow heavily both domestically and abroad to cover ongoing budget deficits. His management of the economy was helped somewhat by a period of relative peace; America was not at war. But even allowing for that, his economics made America the world’s largest debtor nation owing nearly $3 trillion dollars by 1987. Because he was highly selective with the various revenue streams where he applied his increases and cuts, the chief economic indicators for growth, unemployment, poverty, tax revenues and deficits for that period varied wildly across a spectrum of highs and lows. This meant anyone who came after him (i.e. Republican presidential hopefuls) could cherry pick figures and quote percentages for any given period of his presidency and use them to emphasise their own economic plans. In reality, however, their claims were meaningless and could not seriously be applied to present day economic rationalism. In the main, Reagan’s economic reforms favoured big business and the wealthy at the expense of middle and low income workers.

And that brings us to the Tea Party of today. They want less regulation, lower taxes and froth at the mouth whenever the Affordable Care Act (Obamacare) is mentioned. They want policies that essentially place the burden of revenue raising on the less well off, while rewarding the wealthy for being, just that. Sound familiar?

So, how does Reaganomics impact on Australia? Essentially, while not saying it, the Coalition’s approach to economics is a broad version of Reaganomics; not what Reagan did, but the myth of what he did, i.e. lower taxes, having less government regulation, reducing waste and where possible, reducing welfare payments. Our Treasurer, Joe Hockey has made it clear that the age of entitlement is over, that we must learn to live within our means. No argument there. The problem is that Joe Hockey had us thinking originally that he could do this and return a surplus budget. He can’t and he knows it. He knows that our current net debt of $284 billion will increase to almost $400 billion by 2016 when we next go to the polls. That is unavoidable. That is why he is now flagging an increase in our debt ceiling to a staggering $500 billion. This he claims is Labor’s legacy. Really?

Hockey made a lot of noise about the state of the economy before and during the election suggesting that we were facing a national emergency. He has now had time to appreciate the truth of the matter and his rhetoric has noticeably subsided. Prime Minister, Tony Abbott also made a great deal of noise about reducing debt and deficit. The recently announced Commission of Audit is the process by which the new government will determine what stays and what goes. Declining revenues will play a big part in determining the choices available, and the dismantling of the carbon tax will only add to Hockey’s woes. This could hardly be called Labor’s legacy, certainly not in the way Hockey was referring. Dismantling the carbon price will reduce revenue making all of the coalition’s promises that much harder to keep. Those promises include a paid parental leave scheme and a ‘Direct Action’ policy to tackle climate change, the Coalition’s replacement policy for the carbon tax, which will involve paying big polluters to reduce their carbon emissions. Yet, Hockey insists those promises will be met. We can expect the Treasurer to be talking a lot about Labor’s legacy in the coming months. But in reality, the program he is laying the groundwork for, will be very much the Coalition’s legacy. The Commission of Audit report to be completed by March 2014 will show that forward projections of revenues will not accommodate their promises even with their intended budget cuts. Hockey’s options will be a hard pill to swallow and involve raising taxes, borrowing and, heaven forbid, possibly even raiding the future fund. Either way, raising the debt ceiling will be essential. Better to do it now while nobody’s looking. But given the Prime Minister’s attitude to climate change, the greatest temptation for Hockey and Abbott will be to simply dump ‘Direct Action’. It will most likely be delayed, like, forever! The next three years are not going to be pretty for the coalition or the country and the end result will give Labor plenty of ammunition come 2016 when the government will have to explain why the national debt jumped from the present $284 billion to probably in excess of $400 billion in just three years with no plans to combat climate change. Funny how the theory of Reaganomics looks so good on paper, but when applied in practice, will work the same way here as it did in the US.

 

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The job losses Tony Abbott didn’t want to tell you about

Tony Abbott’s pledge to cull 12,000 jobs from the Public Service went down well with the electorate. From the time John Howard took over as Prime Minister, and even slightly before given his pledge to trim the PS in the lead up to the 1996 election, public servant bashing has become one of the Liberal’s favourite election weapons.

There is now a perception in the community that public servants are over paid, under worked, and more importantly, not needed. Nobody seems to care if there are 12,000 less of them.

Defenders of Abbott’s decision argue that nobody will be losing their job as the 12,000 places will be vacated by natural attrition. That still means though, that there will be 12,000 less jobs to be filled from the ranks of the unemployed.

But it is worse than that. ACT and Region Chamber of Commerce and Industry chief executive Andrew Blyth explains the effect in Canberra alone:

About 4500 of the 12,000 redundancies are expected to be in Canberra, although figures are yet to be finalised and the government has said the cuts will be achieved through natural attrition.

Mr Blyth quoted ACT Government figures in his letter to Mr Abbott by stating it would cost the territory economy between $350 million and $650 million.

”A recent chamber survey found a majority of respondents believe both the ACT and national economies will be weaker over the next 12 months,” he said.

The Australia Institute has predicted a plunge into recession for Canberra and up to 5500 job losses in the city’s broader economy if planned Coalition cuts to the public service go ahead.

So that’s a further 5,500 job losses to add to the promised 4,500.

Prior to the election I suggested – and it is worth repeating given the Chamber of Commerce and Industry’s warning – that Tony Abbott’s promise to get rid of public service jobs was nothing more than a vote-winner without considering the consequences. When Howard won office in 1996 he murdered the Public Service in Canberra. The effects were devastating for our capital city which subsequently went into a recession.

But here’s the scary bit: this time, it won’t be confined to Canberra. From the CPSU website we learn that Townsville and Newcastle face the same uncertainty. In Townsville:

One in five Commonwealth public sector jobs and $87 million in wages could disappear from Townsville under a Coalition government, an analysis by the Community and Public Sector Union shows.

The CPSU analysis found 406 of the 2,015 or 21% of Commonwealth public sector jobs were at risk in Centrelink, Defence and Tax.

The CPSU based its calculations on the following:
– Tony Abbott’s policy of cutting at least 12,000 public sector jobs nationally by imposing a hiring freeze which would equate to a loss of 185 jobs in Townsville.
– Broad cuts to public spending needed to fund the Coalition’s election commitments would take another 69 jobs out of the economy.
– And a Commission of Audit to enable the outsourcing/offshoring of public sector work such as payroll, administration and IT which would see a further 152 jobs go.
– By taking the estimated salary for an APS employee of $76,821, the CPSU projects Townsville stands to lose $87 million cumulatively over three years.

CPSU National Secretary Nadine Flood said: “We have already seen what a Liberal government is doing to public services and jobs in Queensland; the last thing that Townsville needs is more cuts under a Coalition government.”

“Remember Campbell Newman promised Queenslanders they had nothing to fear from him when it came to cuts in public sector jobs and services. And then he unleashed savage cuts. “Tony Abbott says he will cut at least 12,000 jobs but those are the ones that we know about. He doesn’t want to talk about the rest because he knows that a vote for the Coalition is a vote for job cuts.”

“The community is going to be hit hard on a number of levels. If one in five jobs go that means there will be hundreds of families living in Townsville with mortgages, kids and commitments who won’t be getting a regular pay cheque.”

“The drop in staffing levels is also going to hit services which will come under increasing pressure to meet the demands of the community,” Ms Flood said.

While in Newcastle:

Nearly one in four Commonwealth public sector jobs and $132 million in wages could disappear from Newcastle and the Hunter region under a Coalition government, an analysis by the Community and Public Sector Union shows.

The full scale of the cuts across the Hunter are laid bare in a report by the CPSU which based its calculations on Coalition policies such as the imposition of hiring freezes, and the launch of a wide-ranging review into the provision of public services. The CPSU analysis found 609 of the 2,551 or almost 24% of Commonwealth public sector jobs were at risk in Centrelink, Defence and Tax, spread across the city, the Hunter Valley and Lake Macquarie.

The CPSU based its calculations on the following:

  • Tony Abbott’s policy of cutting at least 12,000 public sector jobs nationally by imposing a hiring freeze which would equate to a loss of 217 jobs in the Hunter.
  • A Commission of Audit to enable the outsourcing/offshoring of public sector work such as payroll, administration and IT which would see a further 392 jobs go.
  • By taking the estimated salary for an APS employee of $76,821, the CPSU projects the Hunter stands to lose $132 million cumulatively over three years.

CPSU National Secretary Nadine Flood said:

“The community is going to be hit on a number of levels. Over 600 jobs are to go, almost one in four Commonwealth public servants could be out of a job; that’s hundreds of families living in the Hunter with mortgages, kids and commitments who won’t be getting a regular pay cheque. By our calculations the region stands to lose $132 million in wages over three years.”

“The drop in staffing levels is also going to hit services which will come under increasing pressure to meet the demands of the community.”

The CPSU’s report follows a similar one launched in June by the Public Service Association of NSW which estimated that under NSW Premier Barry O’Farrell 1600 state public sector jobs will be lost.

Ms Flood said: “Given the depth of cuts under the O’Farrell government the last thing Newcastle needs is more cuts under Abbott.”

It says something when the Chamber of Commerce and Industry and a union agree on the same issue.

It could be even more frightening if the jobs are made redundant through the cancellation of services. While researching for a Public Service report a few years ago it was discovered that for every Public Service job lost when a program is cancelled or completed, up to three private sector jobs are at risk. Tony Abbott’s promise to cut public spending fires a warning shot that this might very well happen.

These are the job losses that Tony Abbott didn’t want to tell you about.

 

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Savings, savings, savings

“Human beings cannot comprehend very large or very small numbers. It would be useful for us to acknowledge that fact.” Daniel Kahneman, Nobel prize-winning psychologist.

Numbers have always fascinated me. Or rather, I’ve always been fascinated by people’s inability to understand them. If that sounds arrogant and as though I seem to think I’m better than everyone else, so be it. That seems to be a way of making oneself popular these days. For the past few years, the Liberal Party have been saying that they’re just so awesome and that the current government is just a pack of losers, and that they should be government and that they were robbed. Strangely, if they were the team that lost a Grand Final nobody would be impressed by their behaviour, but in politics, it seems to be a way to win people’s hearts and minds.

But I digress. Numbers. Really big ones. Like the budget deficit. It’s really, really big. It’s scarily big. Until you break it down. Then it just becomes mildly scary. Or as one News Limited paper told us last week, the total interest on the Government’s deficit with cost every working Australian about $5 a week. Or $250 a year. Mm, that’s about a day’s wage for some people, an hour’s wage for others, and if Gina gets her way, a year’s wage for anyone in her employ.

Of course, the figure that fascinates me today is the $75,000,000,000 dollars of savings the Liberals have identified over the next five years. That’s a lot. But the first thing that they’ll do, of course, is add to the bureaucracy. From the Liberal Website:

Commission of Audit For the 1st time in 16 years, we’ll immediately establish a Commission of Audit – to identify savings and efficiencies in all areas of government so we can start delivering real and sustainable budget surpluses into the future.

Mm! So they’ll spend money working out how to save money. Or to look at it another way, they’ll create a new bureaucracy that’ll work out how to get rid of the other bureaucracies.

Perhaps, the Liberal slogan could be: We guarantee that we’ll take more off you in tax than we’ll give back in services, because that’s what a surplus means!

Or

Over the past forty years, Labor have given you Medicare (bank), Superannuation, the NBN, the NDIS, and next they’re trying to implement Gonski. Compare that to our proudest achievement: the GST! And we promise we won’t put that up in our FIRST term of Government.

Or (to break down a really big number).

Over the next five years, we promise to take $15,000 off every Australian! Sorry, we promise to save $75 billion.

 

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