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A lover and fighter for truth from way back. Delighted to have an opportunity to talk and looking forward to shaking NSW politics up in a couple of years. Till then, lets learn stuff together hahahaha ;)

Website: http://www.melmacpolitics.com

Two weeks in, how does Mr Trump affect Australia?

I read with interest an article in The Saturday Paper called Goad of Silence by Mike Seccombe this morning, this led me down into an intriguing rabbit hole into the depths of the internet. Mr Seccombe described how different official social media channels of information, such as the National Aeronautics and Space (NASA) Administration Twitter account were being blocked by the Trump administration. And that “rouge” unofficial Twitter accounts had sprung up in their place such as @RogueNASA, I went to investigate the @RogueNASA account. Besides being impressed by their fund-raising efforts with pins and patches for charities such as Black Girls Code and FIRST Robotics!, I came across a non-descript looking link for a newsletter titled Garrett on Global Health. It was written by Laurie Garrett, Senior Fellow for Global Health Council on Foreign Relations. This nondescript looking link is the most comprehensive report detailing the first two weeks of the Trump Administration that I have come across. Ms Garrett provides analysis of three national security presidential memoranda (NSPMs), presidential statements, Executive Orders (EOs) and provides a list with links below, of nineteen presidential actions undertaken by President Trump between the dates of January the twentieth and the thirty-first of this year.

  1. “minimizing the economic burden” of the Affordable Care Act (ACA)
  2. freezing all regulations
  3. reinstating the Mexico City abortion policy (also known as the global gag rule)
  4. scrapping the Trans-Pacific Partnership
  5. freezing hires for the federal workforce
  6. advancing the Dakota Access Pipeline
  7. advancing the Keystone XL Pipeline
  8. expediting environmental reviews on infrastructure projects
  9. promoting pipelines “produced in the United States”
  10. reviewing domestic manufacturing regulation
  11. increasing border security measures
  12. eliminating “catch-and-release” strategies
  13. pursuing undocumented immigrants
  14. reevaluating visa and refugee programs
  15. strengthening the military (NSPM 1)
  16. reorganizing the National Security Council (NSPM 2)
  17. implementing a lobbying ban
  18. calling for a plan to defeat the self-declared Islamic State (NSPM 3)
  19. reducing regulations

Out of forty-three top State Department positions, thirty-five were vacant by the second of February. Usually new presidents want to avoid mass resignations and wait until replacements have been found. Mr Trump’s party controls the House and the Senate and his party is most likely to support his choice of Supreme Court nominee. This means that the presidential actions above are expected to be backed by legislation and to become law. As Ms Garrett highlights, this behaviour from a new president isn’t unusual, what is different though is the speed of these changes and the confusion and turmoil that it has brought to the executive branch.

On the twenty-seventh of January Mr Trump signed an EO titled: “Protecting the Nation From Foreign Terrorist Entry Into the United States.” Iran is one of seven countries included in the ban, the other six are Syria, Iraq, Sudan, Libya, Yemen and Somalia. Mr Trump reportedly has business connections with Egypt, Turkey and Saudi Arabia, hence those countries seemingly being deemed as safe. It has been estimated that around ninety thousand people have been affected by this, including an Australian born teenager denied a visa to attend space camp in America because his parents are from Iran. A lawyer for the Justice Department revealed last Friday that around one hundred thousand visas have been revoked since the ban was put in place. A formal dissent memo was signed by over a thousand State Department employees, this is unprecedented in the first month of a new presidency, as well as the record amount of signatures. White House spokesman Sean Spicer has said that he was aware of the memo but warned that diplomats should either “get with the program or they can go.”

There has been concern amongst the scientific community that science data stored on American government websites will be erased. Scientific gatherings to save and store government data stored have been organised by a non-profit group called 314 Action.

“The government has done a great job of collecting and maintaining climate change data on these websites located all across the federal government,” said Shaughnessy Naughton, the founder of 314 Action. “The concern is that the data may no longer be publicly available, and then that they may no longer gather the data. It’s a lot easier to deny climate change when you don’t have data.”

Data Refuge is a public, collaborative project that was established by Penn libraries and the Penn program in Environmental Humanities. Data Rescue events are also being held all around America where volunteers are copying data from government sites and government data bases for safe keeping. After Mr Trump was inaugurated a few agencies restricted the amount of information available to the public. An EPA memo said “no press releases will be going out to external audiences, no social media will be going out … no blog messages … no new content can be placed on any website.”

America has a Whistle-blower Protection Enhancement Act that has been in place since 2012 and by chance the Follow the Rules Act happened to be before “The House Oversight and Government Reform Committee” last Thursday. Legislation strengthening measures related to nondisclosure policies, or gag orders, that restrict the ability of federal workers to communicate with Congress, the Office of Special Counsel (OSC) and inspectors general were approved. “This law has lived up to its name,” said Eric Bachman, OSC’s deputy special counsel. “It has significantly enhanced OSC’s ability to protect federal employees from retaliation.”

An America First Energy Plan was also released shortly after Mr Trump’s inauguration and it contains such phrases as: “Sound energy policy begins with the recognition that we have vast untapped domestic energy reserves right here in America. The Trump Administration will embrace the shale oil and gas revolution to bring jobs and prosperity to millions of Americans. We must take advantage of the estimated $50 trillion in untapped shale, oil, and natural gas reserves, especially those on federal lands that the American people own. We will use the revenues from energy production to rebuild our roads, schools, bridges and public infrastructure. Less expensive energy will be a big boost to American agriculture, as well.”

“The Trump Administration is also committed to clean coal technology, and to reviving America’s coal industry, which has been hurting for too long.” And that “Lastly, our need for energy must go hand-in-hand with responsible stewardship of the environment. Protecting clean air and clean water, conserving our natural habitats, and preserving our natural reserves and resources will remain a high priority. President Trump will refocus the EPA on its essential mission of protecting our air and water.”

The Northern Australia Infrastructure Facility Act 2016 (NAIF) was passed by the Australian Parliament on 3 May 2016, with its headquarters established in Cairns on the 1st July 2016 and it is supported by the Export Finance and Insurance Corporation (Efic). It’s offering $5 billion in concessional loans to encourage private sector investment in Northern Australia. Last Wednesday the Prime Minister (PM) of Australia, Malcolm Turnbull addressed the National Press Club (NPC) and said

“We will need more synchronous baseload power and as Australia is a big exporter we need to show we are using state-of-the-art, clean, coal-fired technology,” and that “The next incarnation of our national energy policy should be technology-agnostic.”

Treasurer Scott Morrison stated after Mr Turnbull’s NPC speech that ‘Coal is a big part of the future under a Coalition Government’ Mr Morrison also told the ABC that he won’t rule out Clean Energy Finance Corporation (CEFC) funding towards clean coal either “It’s the Clean Energy Finance Corporation — it’s not the wind energy finance corporation.”

Last Friday Australian Resources Minister, Matt Canavan, announced that he had opened up the $5 billion NAIF fund for new “clean-coal” power stations. He told ABC AM that “I’ve received some interest over the past week associated with our commitment to build base load power stations, including to support clean coal options”

Mr Canavan also cited a 2012 report by industry consultants GHD, which indicated that clean-coal power stations could be commercially viable in Australia’s north. “Some people might not realise that in North Queensland there is no base-load power station north of Rockhampton and industrial consumers in north Queensland pay often up to double the prices in southern Queensland”

Mr Canavan dismissed comments by AGL and Energy Australia that argued that new power stations would be expensive to build and would require significant public funding. “With all respect to those very eminent companies, we wouldn’t take advice from Coles or Woolworths on whether we should allow Costco for example to come into the Australian market,” Mr Canavan said.

“I am not surprised that existing generators don’t want another large-scale base load power station to come into the market, part in an area like North Queensland where they are clearly making good money selling electricity at very high prices.

“Good luck to them and good luck to them in the market.”

Australian Conservation Foundation chief executive Kelly O’Shanassy, doesn’t agree and said that there was no such thing as “clean coal”. “Every coal-fired power plant is damaging our climate, intensifying heatwaves and bushfires, polluting our air and bleaching coral reefs,” she said.

“Australia needs energy that doesn’t pollute, not energy that pollutes a little less than Australia’s existing coal generators, some of which are among the dirtiest in the world.”

Noting the use of “base load” in the quotes above, I will quote the Minister for Foreign Affairs Julie Bishop, in 2014 “It’s an obvious conclusion that if you want to bring down your greenhouse gas emissions dramatically you have to embrace a form of low or zero-emissions energy and that’s nuclear, the only known 24/7 baseload power supply with zero emissions,” she told Fairfax Media.

A “baseload power supply” is in a nutshell, “continual power supply.”

“I always thought that we needed to have a sensible debate about all potential energy sources and, given that Australia has the largest source of uranium, it’s obvious that we should at least debate it,” said Ms Bishop.

It was reported last week by the Guardian that long term coal industry lobbying for years in Australia, by American and overseas corporations, has put pro-coal talking points naturally into Australian leaders’ mouths.

As John Quiggin wrote in Crikey last month, the only real viable option for clean coal was via a “carbon capture and storage” program or (CCS). The only version of CCS that could be considered commercially viable is when Carbon dioxide (CO2) is pumped into exhausted oil wells. This works best though with a pure source of CO2 such as natural gas rather than a mix of gases from coal-fired boilers. After decades of work and funding spent on CCS technology (including $590 million spent by Australian governments since 2009), there is only one operational power plant using CCS, the Boundary Dam project in Canada.

Even if all of the coal-fired CCS projects listed by the Global CCS Institute in Melbourne as possibly happening by 2030, are included in the total amount of CO2 captured, it would be less than 20 million tonnes a year.

Australia roughly generates this amount of energy in two weeks.

The Turnbull government’s administration, despite the focus of the main stream media on presidential phone calls and name mishaps, appears to be pretty much aligned with the Trump administration. Fred Palmer was the Peabody Energy Vice-President for government relations in 2010 and in the same year that the “Advanced Energy for Life” campaign was born. Peabody Energy Corporation (Peabody) is headquartered in St. Louis, America and it is the largest private-sector coal company in the world. Peabody has been developing, refining and honing its campaign tactics ever since. Mr Palmer describes former Australian PM Tony Abbott, as a “precursor” to Trump in the context of climate change and energy policy.

“When Tony Abbott came in, he came in running against the carbon tax. When Donald Trump came in, he came in running against the Clean Power plan. That’s the parallel I am talking about.” When asked if he had problems getting through to the federal government he responded, “No it was not. I was thrilled to have that meeting and reception that I got,” says Palmer.

“I had zero problems. If they had time, they talked to us.”

He also thinks that Mr Trump will be “spectacularly successful”.

And that “We are going down the path of his America first energy plan. There is nothing in there about renewables and there’s nothing in there about carbon taxes. It’s fossil fuel-centric and it is meant to be. It’s a fossil-fuel future for the United States.”

Followed by “I guarantee you the world is going to follow.”

There is no money to be made out of coal today, it’s had its time and has progressed us from the days of having to rely on whale blubber or whale oil for energy sustenance and steam powered ships. Renewable energy can also be a base-load energy that Australia can rely on and lead the world in how to do it rurally even, if there is political will.

Australia is in a unique position, not just in regards to our geological positioning and weather elements but we are surrounded by water and we live in very different circumstances, when we compare this with land locked countries in the Middle East. Countries such as Syria that Australia is involved in protecting values wise or war wise, is a part of this ban too. It is high time that we question our values and ethics as a country. Our country’s shipping ports also need to be thought about for the long-term of Australia’s future and not just a short-term sugar hit for a state government’s or federal government’s budget bottom line.

 

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Human Services Privatisation Creep and TiSA

Australia has the highest rate of private incarceration per capita of any country in the world. We imprison more people now than in any time in history. Private prisons operate in five of Australia’s states: Queensland (QLD), New South Wales (NSW), South Australia (SA), Victoria and West Australia (WA). There are eighty-two state prisons between these five states with around 20% of Australia’s prison population residing in nine private prisons. Victoria has the highest number of inmates held in private prisons than in any of the other four states. It is comprised of thirteen state run prisons and two privately owned prisons. As of 2014 the two private prisons accounted for 31.8% of the total inmate population or 1,845 out of 5,800 inmates.

A report called: Prison Privatisation in Australia – The State of the Nation June 2016 was the first to collate publicly available information on private prisons in Australia. The key areas that were explored were Accountability, Costs, and Performance and Efficiency. The first private prison to open was the Borallon Correctional Centre (CC) in QLD, near Ipswich. It was operated by Serco until it closed in 2012. Serco is one of three private prison contractors favoured by state governments, the other two are G4S and the GEO Group (GEO), formerly known as Australasian Correctional Management (ACM). The privatisation stemmed from a 1988 report called the Kennedy report. It was chaired by businessman and accountant, Jim Kennedy and its intention was to reform corrective services in QLD. A program for privatisation was set out within his report: ‘(t)he opportunities for introducing private sector involvement are substantial and should lead to an increase in cost-effectiveness’. The reasoning behind this was that in some areas private providers ‘can do it cheaper and better’ and that introducing competition to the public sector would allow for the measurement of public sector performance. It was budgetary concerns with staff sickness and over-time that led to these measures not overcrowding as was the case for the other states except SA. Borallon CC was back in state hands in April 2016 as an education centre called ‘earn or learn’ for eighteen-thirty-year old offenders.

NSW followed QLD’s lead with an ‘Investigation into Private Sector involvement in the NSW Corrective System’ in 1989. The report cited a claim that Borallon CC had made cost savings of 7.5-10%. One parliamentarian cast doubt over the fact that no information had been provided as to how these numbers were established or calculated. Despite this questioning, Junee CC near Wagga Wagga was approved as NSW’s first private prison. It was originally managed by ACM in 1993, the ACM was restructured and became the GEO Group in 2004. GEO won the bid again in 2009 and still manages the facility today.

Independent inspection of private prisons in NSW has been sporadic, an Inspector of Custodial Services (ICS) was appointed in 1997 with a review off office scheduled for 2003. The ICS was to address issues not already covered by the Ombudsman. The review was carried out by former Police commissioner John Dalton and former chairman of the Corrective Services Commission, Vernon Dalton. They recommended it to be discontinued citing that many duties overlapped with that of the Ombudsman and the government accepted their recommendations. Another ICS wasn’t appointed until another nine years later in 2012 and within this time frame in 2009, the NSW government privatised Parklea CC in the North West of Sydney. The contract was awarded to GEO and it revised its plans to sell Cessnock CC in the Hunter due to an economic downturn in the region.

With a record 12,000 inmates in NSW, the NSW government announced “Better Prisons” in March 2016, with plans to “market test” the operation of the John Morony CC near Windsor, Sydney. For contrast, as of June 2015, there were 36, 134 people incarcerated across all eight states in Australia. Private companies were invited to compete against state owned, Corrective Services NSW (CSNSW) for the tender with a winner to be announced in early 2017. A $3.8 billion expansion of the prison system was also proposed and includes a “Commissioning and Contestability Unit” costing $2.9 million. The unit is based on the work of former Serco worker, Gary Sturgess who was also an adviser to former Liberal premier Nick Greiner. The NSW shadow treasurer Ryan Park said “Contestability shouldn’t be an evil word – but under this government, all it means is privatisation by stealth. This government has shown time and time again that contestability isn’t about service delivery – it’s about saving money.” Mr Sturgess argues that it’s not about actually privatising but rather the threat of it to get public services and unions to improve their efficiency. “Gladys Berejiklian understands contestability – she used that approach as transport minister when she took on the private bus monopolies in western Sydney, and then initiated a reform agenda within the State Transit Authority … using the threat of competition if they did not reform,” he said.

The “Better Prisons” reforms also include cutting the number of teachers from CSNSW from over one hundred full-time positions to twenty. Corrective Services Minister David Elliott is to create sixty more roles but they don’t require a teaching degree. Prison teachers went on strike and up to two-hundred people rallied outside the NSW Parliament in September last year. “No-one can do the job that you do, you are highly skilled” Labor’s Guy Zangari told the crowd. “It’s more than just reading and writing, it’s more than just gaining skills to get a job.”

The Prison Privatisation in Australia – The State of the Nation June 2016 report covers publicly available data as of December 2015, and concluded that many problems in QLD private prisons were mirrored in NSW. NSW governments have favoured confidentiality and commercial-in-confidence protections for private, over providing the public with any transparency about their operations and costs. When it comes to Performance Level Fees (PLF), Key Performance Indicators (KPI) or bonuses for reaching “performance targets”, it gets even more opaque. One example from 2006 involved GEO still being awarded its PLF despite not meeting its performance targets for Junee CC. The justification given By Commissioner Ron Woodham was that ‘performance linked fees were designed to encourage performance rather than be punitive’. The Department of Corrective Services (DCS) makes an annual report about some of the prison’s performance but not the costs, they’re aggregated. In fact, the researchers of the above report could find no publicly available information regarding the breakdown of private prison costs on a year-by-year basis. NSW has an Ombudsman that handles prisoner complaints and reports their data prison-by-prison. According to the data there are more complaints in private prisons than in public ones. There’re contract “monitors” that make reports about both private prisons in NSW but these reports are also not publicly available. The monitors reports don’t marry up with the Ombudsman’s either especially regarding complaints made. In 2011 when inmates died at Parklea and three men escaped from the prison, there was no mention of these incidents at all in the monitors reports.

It is of interest that the NSW government at the end of March 2016, made both the Junee CC and the Parklea CC contracts available through the CSNSW website. The contracts are heavily censored, for example in schedule six of the Junee contract ‘Operational Service Level Fee and Opioid Pharmacotherapy Program Fee’, all of the financial information has been redacted. In section eight, the ‘Key Performance Indicators and Performance Linked Fee’ has had the targets for each KPI censored, meaning that we don’t know the level of service that is expected of GEO. The Parklea contract states that the operational fee in schedule six is $29, 124, 488 but any information relating to the breakdown of these costs has also been redacted. It also lists financial penalties for major incidents such as deaths in custody but it doesn’t include the KPI’s against which the PLF is calculated. Once again, we have no idea what level of performance is expected of the contractor by the NSW government.

Image by artist Banksy

Treasurer Scott Morrison asked the Productivity Commission to investigate privatising human services. The preliminary findings of the inquiry suggested that social housing, public hospitals, dental services, aged care, services for remote Indigenous communities and social housing services could all be reformed. The commission will work on recommendations for each sector and report back to Mr Morrison in October this year.

There has been much said about the Trans-Pacific Partnership (TPP) by Prime Minister Turnbull, President Donald Trump and the media. Mr Trump has made it clear that he believes that it’s not in America’s best interests to sign the agreement but Mr Turnbull doesn’t want to let it go. What has been missing is any talk about the Trade in Services Act (TiSA) agreement in the media or by Mr Turnbull or Mr Trump. There is a media release from October 21st last year by Trade, Tourism and Investment Minister, Steve Ciobo. He chaired a ministerial meeting on TiSA in Oslo, Norway that weekend and the release talks of ‘increasing Australian services exports, a key part of the Turnbull Government’s national economic plan to create jobs and drive economic growth.’

Australia’s services sector is a major part of our economy and accounts for 70% of economic activity. It employs four out of five Australians and accounts for 20.9% of all of Australia’s exports. Services account for around 75% of the European Union (EU) economy and 80% of the US economy. TiSA was also meant to be signed off with the TPP at the end of last year but it stalled due to disagreements about the free movement of personal data across borders. Mr Trump has already promised and already met with thirteen US tech giants last year and promised to make it “a lot easier” for their companies “to trade across borders.”

TiSA according to Wikileaks and other whistle-blowing sites is a deal that will “lock in” the privatisation of services, even in cases where private service delivery has failed. Government’s would never be able to return water, energy, health, education or other services to public hands. Perhaps this’s why there is such secrecy and a five-year clause preventing public access to the TiSA agreement after it has been signed.

We have seen the Australian federal government’s attitude towards human services with Centrelink and Medicare, and the absolute lack of transparency when it comes to the treatment of private prison operators in Australia. Should our tax payer dollars be used to pay private, overseas companies bonuses for fulfilling their contract’s? If companies need incentives to do a good job it sounds like human services belongs in the hands of public. When will state government’s using private, prison operators admit that a lack of staffing appears to be much of that sectors problems? And lastly, I implore you to please help create awareness about this, if they come for our services it will be the end of Australia or the world as we know it.

This article was originally published on Political Omniscience.

 

The Centrelink debacle has only just begun …

We hear Artificial Intelligence (AI) bandied about a lot in recent times as well as innovation and agility and more recently we have been hearing terms such as robo-debt recovery, algorithms and malware. The Income Security Integrated System (ISIS) ISIS was set up in 1983 and oversaw welfare payment deliveries, customer service, support and compliance activities for Centrelink. In 2015 Marise Payne, former Human Services Minister (and now Defence Minister) called for an overhaul of the system: ‘To deal with the increased demands over the years the original system has literally had another 350 systems bolted on. To put it simply, we are running a turbo-charged Commodore 64 with a spoiler in the age of the iPhone.’

In the 2015-16 budget, the Welfare Payment Infrastructure Transformation (WPIT) program was announced as the replacement for ISIS. The 2015-16, budget measure worth $60.5m is part of a $1.5 billion, seven-year program. The program was described by the government as one of the world’s largest social welfare ICT transformations.

In September 2015, the Department of Human Services (DHS) asked for expressions of interest (EOI) for the first tranche of WPIT for a core software provider. As part of tranche one a panel of members was also to be formed to compete for the other tranches. In a statement, Ms Payne said that: “Finding innovative and expert industry partners is the first step in providing a modern platform that will make interacting with government services easier for our customers,” the Minister added. “Over the next year, the department will commence two major procurement activities to secure a Core Software Vendor and Systems Integrators.”’

“The new system will reduce red tape for customers, lower the costs of administering welfare payments and save taxpayers money,” Payne said. “Customers can expect to see improvements to our payment systems by the end of 2016 with enhancements that will make online interactions quicker and easier.”

On March 2nd 2016, legislation was introduced to parliament to assist the government in chasing welfare debt by Social Services Minister Christian Porter. The changes allow interest to be charged on debts, ends the six-year limit on when debt can be pursued and stops debtors from being able to travel overseas. The new interest charge is around nine-percent and applies to social security, family assistance, child care, paid parental leave and student assistance debt. It won’t be imposed on those that have an approved repayment plan. The six-year limit brings it in line with tax debt and the travel ban brings it in line with child support debtors.

And by March 20th it was reported in the media that the DHS had partnered with the Australian Federal Police (AFP) in a venture called Taskforce Integrity. Welfare recipients in areas identified as high-risk, received letters with the AFP logo alongside the Centrelink logo. This is a first, using a police logo on a welfare letter. The first batch of letters was sent to South Queensland and will be rolled out to other geographical areas around Australia considered high risk or noncompliant. The letters warn that the taskforce was “currently working in your community” and that providing the wrong information could constitute welfare fraud, resulting in a “criminal record or a prison sentence”.

The government’s new automated compliance system to detect overpayments began on the 13th of July last year. The system compares Centrelink information with records such as tax records, saving the government money on employing staff. The first error to come to light was it not computing the difference between 52 weeks in a year and 26 fortnights. And in December last year stories from the public began trickling through to the media.

In early August 2016, German software company SAP was selected to be the government software provider and tranche two was opened up for bidding. In the MYEFO published in December 2016 it was revealed that tranche two of the WPIT will cost $313.5 million over four years. The panel is to consist of IBM, HP, Capgemini, and Accenture; with the latter two currently competing for tranche two below:

  • Tranche 2 – Student payments
  • Tranche 3 – Job seeker payments
  • Tranche 4 – Family payments, including disability and carer payments
  • Tranche 5 – Seniors, pensioners and any remaining payments.

It is of note that IBM was also awarded a five-year contract by the DHS in March 2016 worth $484 million. DHS CIO Gary Sterrenberg said: “This innovative and flexible agreement allows the Department to use products, services and expertise through an on- demand model. It ensures value for money for government in maintaining the Department’s existing spend with IBM, with the opportunity to realign technology and services to areas which provide better outcomes for our customers over the five-year term.” And that: “This will also ensure the Government is prepared to transition to new infrastructure with more dynamic capability to support future programmes.”

This week Centrelink’s new robo-public servant was introduced in the media, and it is being tested on the public next month in February. Two robo-assistants will answer questions from the public, one will focus on the National Disability Insurance Scheme, (NDIS) and the other one on student payments. The plan is that if the trials are successful, they will be rolled out to replace traditional public servant roles behind the desk and on the phone in the DHS. Human Service’s Chief Technology officer Charles McHardie, also believes that virtual assistance will have a central role in the future of claims processing at the DHS or in WPIT.

Concerns about the right use of AI are real and there are many examples of it helping to increase inequality in many areas of our lives. Sexism, racism and other forms of discrimination are being built into the machine-learning or predictive algorithms, either intentionally or unintentionally. Machines are taught by humans and this includes any bias that may have. An example of predictive algorithms is Pro Publica’s study of an algorithm, built by a private company, it incorrectly flagged black defendants as “future criminals” more than twice that of white defendants. “The reason those predictions are so skewed is still unknown, because the company responsible for these algorithms keeps its formulas secret,” wrote Microsoft Research principal researcher Kate Crawford in “Artificial Intelligence’s White Guy Problem.”

Australian businesses spend an average of $6 million a year on AI technologies according to recent research by Infosys. Algorithms are being developed for more and more things such as predicting investor responses to market shocks and offering financial advice. The research also found that: “Happily, Australia was the most ethically conscious country of the seven surveyed, with 69% [of businesses surveyed] saying ethical concerns were a major barrier to their organisation’s AI deployment plans, compared to just 33% in the US.”

To date 230,000 debt recovery letters have been sent out to Australians. There’s been countless articles written about it and there are 350 individual stories shared on the Not My Debt web site and a false debt tally of $2,124, 501. Thousands of Indigenous Australians have been sent letters with some just paying it off despite knowing it is wrong. Daniel Hayes told NITV News he was repaying the debt but when he started seeing news articles he stopped paying Centrelink. He said in early January that: “I’m in the middle of repaying them $3350 for apparently not declaring correctly in periods where I didn’t even have a job. When I asked for proof, they told me I had to go through my bank records, so I’ve paid it for a year down to $1600,” he said.

In early January, independent MP Andrew Wilkie, said: “I have had at least four people now approach me in my office who I would describe as presenting suicidal and in all those cases we’ve taken what action we thought was appropriate.”

Mr Wilkie requested an investigation into Centrelink by the Commonwealth Ombudsman before Christmas, they agreed on January 9th. Deputy ombudsman, Richard Glenn told the Guardian that the matter was “of significant interest to this office”.

“I can certainly say the ombudsman has approved an own-motion investigation into the matter… this one will be self-initiated because we have a number of complaints and there is significant public controversy about the issue. So, it is an inquiry into the issue at large, rather than into a specific complaint,” Mr Glenn said.

“Certainly, there’s enough information from complaints we’ve received and … that it’s an issue of significant interest to this office, and we’ll be pursuing it.”

The focus will be on three areas: the data-matching process used to compare Centrelink records with those of the tax departments; how Centrelink communicated with clients and how the agency managed the fallout.

Centrelink has been referring distraught people to Lifeline and several current and ex-Centrelink employees have told Mr Wilkie that there was little to no training for the recovery program. Mr Wilkie has written to the Ombudsman this week sharing what he has been told. It all reads badly but what jumps out at me, is that it has been alleged that senior departmental staff have been encouraging officers to compete with themselves over who can achieve the highest debt recovery quotas.

While all of this has been going on for weeks, the government denies that there is a problem, although they have agreed to soften some wording in the letters. And they’ve agreed to start sending letters by registered mail so that Centrelink can track if letters are being received. Many people have been unaware of any alleged debts until a debt collector was knocking on their door.

So far only The Australian has reported that there will be a senate inquiry into Centrelink. Perhaps last year’s failed Census inquiry report can assist them with it. The Turnbull and the Abbott governments don’t have a great record with technology. News about Australia’s biggest infrastructure, the National Broadband Network (NBN) is reduced to tiny PR pieces talking up their rollout but neglecting to tell the rest of the story. The census fallout may not be felt now but it will, that data has been compromised and is vital for planning things like infrastructure. Seeing this play out and knowing that the government is nowhere finished with their five-seven year WTIP plan, sends a shiver down my spine. We can take comfort in the fact that it has united us, so many are fighting for those affected but it is bittersweet, because it feels intentional and a government at war with its own people will never end well.

This article was originally published on Political Omniscience.

 

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Gentrification Creep

The City of Sydney Council is concerned about the NSW government plans for a 20 and 30-storey tower precinct at the Waterloo housing redevelopment site in Sydney. The Chief Executive Officer, Monica Barone said Urban Growth NSW seemed to be acting as a government planner, as well as property developer. Urban Growth NSW was formerly Landcom but with greater powers and it still has former Liberal leader John Brogden as its chairman. It is a government agency in charge of big new property projects including Rozelle, The Fish Markets, Glebe, The Powerhouse Museum, White Bay and North Parramatta. Urban Growth NSW pushed for the Waterloo station to be built rather than the Sydney University station as a justification to build 10,000 new dwellings while replacing 2,000 social housing units. The reasoning being that the new private dwellings will pay for the social housing dwellings in the area.

The first major public forum for the development was held in February a couple of months after residents were told that their homes were to be destroyed, to make way for a “vibrant new community”. Leaflets were handed out to the crowd but Mr Hazzard didn’t have many answers for them just that: “Everybody here in Waterloo will have the entitlement to come back into their housing, and it will be done progressively over 20 years” to which the room laughed not just once but twice after he was translated in Mandarin and Russia. “Twenty years! We’ll all be dead!” someone yelled from the crowd.

Also in February this year the NSW government issued a tender for Hong Kong style high rises at the new Sydney Metro train stations including Waterloo. Hong Kong’s railway was built by private company MTR in exchange for property development rights in the air space above each station. MTR is part of a consortium that will operate Sydney’s first private railway, the Metro Northwest this contract doesn’t involve air space rights though. MTR has also lobbied the Baird government to adopt its “value capture” modelling for future projects. This involves evaluating the additional land value around urban rail, with the added value paying for the new infrastructure. Or at the very least lowering the construction costs of new infrastructure. The Baird government hasn’t said if property development rights above stations will be awarded in a separate contract to the station construction. An industry briefing last December however found that there was “significant interest” in property development above stations, especially in the CBD.

RedWATCH is a Waterloo community group meeting and last week Urban Growth NSW attended its first one. Convener of the group Geoff Turnbull said: “People don’t really have a sense of what is being talked about other than they are going to be upset and dislocated.” He also said: “So far people really know nothing more than when it was announced,” and that the entire process was, “callous.” One resident labelled the project as a, “social experiment,” and, “disrespectful to the community.” The master plan is expected by the middle of the year but with an election on July the 2nd, perhaps this will be put on hold until after it. Residents are to start being relocated as of the middle of next year, to where nobody knows yet.

The Greater Sydney Commission officially launched on January 27th this year and is being chaired by Prime Minister Malcolm Turnbulls’ wife Lucy Turnbull, a former Sydney Mayor. Mrs Turnbull is joined by three other “Greater Sydney commissioners”, Environmental commissioner, Rod Simpson, Social commissioner, Heather Nesbitt and Economics commissioner, Geoff Roberts. Mrs Turnbull will essentially have the power to remove local councils as a “relevant planning authority” if needs be and has basically received the formal powers of the Planning Minister. There will be six districts and a district commissioner for each one, four have been appointed with two more to go. “Sydney Planning Panels” (SPP’s) don’t exist yet but there has been much conjecture about them and they’re slated to begin at the end of this year or when the district plans become effective. Not much details as to how much power they may wield as yet or even if they will be put in place.

In Western Australia (WA) though they have something similar called “Development Assessment Panels” (DAP’s). State-appointed DAP’s instead of councils have the power over any Perth development worth over $10 million. SPP’s are slated to be responsible for any capital investment proposals with value over $20 million and proposals between $10-$20 million that have been delayed by more than three months. We can only wait and see further details when or if they are ready but councils in WA are lobbying for DAP’s to be scrapped. Cottesloe Councillor, Sally Pyvis is concerned about communities losing their voice and called on new Planning Minister, Donna Faragher to “clearly outline the true cost to the community, local government and industry of this additional administrative layer”.

The City of Sydney Council managed to survive the NSW government amalgamations as a stand alone Council. If it was merged with Woollahra or Woollahra, Waverley and Randwick, the Super Council would’ve most likely been in control of the Liberal Party. It is financially stable as is the Randwick Council but it was found not to have met the “scale and capacity test for a global city”. Lord mayor, Clover Moore has past experience with a prior amalgamation taking 3-5 years to complete and not wanting a distraction from the current $40 billion building boom in the CBD.

And what of small businesses inconvenienced after being on a property in Waterloo for 100 years like Bragg Printing? It’s being compulsorily acquired and there is nothing they can do about it. The owner Arthur Habib says:

“The government has watertight legislation, they tell us there is nothing we can do. They have told us we have to be out in six or seven months. We are now in limbo and in the hands of the costly legal system with conflicting information in regard to the valuation of our building and relocation costs, which will be considerable as we have six offset presses, some historical letterpress presses and various finishing equipment. We are not able to make any move until such time that we have some firm figures to work with for a building and relocation.” Mr Habib also said “At first we were delighted when Waterloo was chosen as the site for the station and we all assumed it would be built on the 18 hectares of government land that sits across the road from us in Cope Street. But it turns out the government is doing a land grab from small business at the bottom end of town to on-sell the air space together with its public housing estate to developers in the big end of town.”

The Waterloo redevelopment has had countless studies and reviews over the last 10-15 years, they should be available for the public to view. The lack of community consultation for it as well as forced council amalgamations is troubling in a democratic society. I also question why a Liberal state and Federal government appear to be adding red tape and more powers to the Greater Sydney Commission. We are in disruptive times as it is, now more than ever the public deserves to not only be consulted but to be a part of the decision process otherwise it is not democracy. Decisions in the hands of a few with power, coupled with land grabs and negative gearing gone wild is taking us backwards to a type of feudal system.

This article was originally published on Political Omniscience.

 

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NSW Government push to amalgamate councils goes awry

The Independent Review Panel’s final report into local councils was released in October 2013 and recommended amalgamations of councils among other things. In September 2014 Premier New South Wales (NSW) Premier Mike Baird, announced his Fit for the Future package that included funding of up to $1bn including cash incentives as sweeteners to merge.

It included: $258 million to assist councils who decide to merge and make the changes needed to provide better services to communities ($153m for Sydney councils and $105m for regional councils) and $13 million to support councilors who “lead the transition to a new council”; Cheaper finance for councils to build and maintain the facilities that communities need, saving them up to $600m; Up to $100 million savings through reductions in red tape and duplication; And improvements to the local government system, including the laws that govern it, the way the State works with councils and the support that councils receive.

The cheaper finance portion would only be beneficial if a council borrowed money from the NSW government of which it would probably receive a dividend meaning the $600m would most likely be covered by other councils and not the state government. President of Local Government NSW, Cr Keith Rhoades said “While there are many aspects of this reform package that councils agree with, the NSW Local Government sector also universally opposed the recommendation in the final report of the Independent Local Government Review Panel about rural councils having their responsibilities and regulatory powers stripped back. We will continue to oppose the Government on this issue should they persist in paring back rural councils. Rural communities deserve the same level and quality of council services as their city counterparts – another fact.”

Fit for the Future had the Independent Pricing and Regulatory Tribunal (IPART) assess whether councils were financially viable alone or whether they should merge with neighbouring councils. On the 20th of October this year IPART found that more than two-thirds of Sydney councils were unfit, as well as more than half of the regional councils. Only 52 of 139 proposals were accepted that were submitted by 144 local councils, including four merger proposals covering nine current councils. Most councils that wanted to continue to operate alone passed the financial criteria but not on “scale or capacity”, and the report found that amalgamations could deliver $2bn in savings over the next 20 years. Lord Mayor Clover Moore was quick to reject the finding and said: “To say the City is somehow unfit in the face of this strong evidence to the contrary makes a mockery of the entire review process, and throws into question all decisions made as a result.” The chairman of IPART interestingly is Peter Boxall, he was also a commissioner for the Abbott Government’s Commission of Audit (COA).

An Upper House inquiry was set up to examine Mr Baird’s amalgamation push and it found yesterday that the process was flawed from the beginning, and that IPART was actually the wrong organisation for the job. “While IPART has significant capacity to analyse the finances of local government, it does not have the demonstrated skills or capacity to assess the overall ‘fitness’ of councils as democratically responsible local governments,” the report said. It also said that: “The scale and capacity criterion was a flawed criterion … and accordingly assessments of councils’ fitness based on this threshold capacity are not well-founded.” Committee member Peter Primrose, said that IPART’s findings were limited by the terms of reference. “It was a set-up from beginning to end” he said. “I don’t blame IPART. I blame the terms of reference which were handed to them by the Premier. “They had to find this illusory thing on the basis of this nonsense called scale and capacity.” The first of the 17 recommendations is “that the Premier and NSW Government withdraw the statements that 71 per cent of councils in metropolitan Sydney and 56 per cent of regional councils are unfit”.

It also found that the Baird Government should commit to no forced amalgamations of NSW councils unless they were bankrupt or otherwise unable to service their communities. Randwick council informed its residents that the NSW Government has made it clear that doing nothing is not an option. Randwick Mayor, Ted Seng said: “Randwick City Council already has a balanced budget and remains debt-free. Council is operating well and providing high quality services and facilities for our community,” And that “Unfortunately, despite Council’s excellent financial and asset management position, the NSW Government wants us to respond to the Independent Local Government Review Panel’s recommendations for ‘scale and capacity’.

It appears that the ‘scale and capacity’ part of the terms of reference, was almost a ruse to sneak forced amalgamations in. Randwick Mayor Mr Seng, also said that: “The Independent Review Panel’s final report released in October 2013 recommends an amalgamation with City of Sydney, Woollahra, Waverley and Botany councils – building a ‘global city’ with more than 500,000 residents. We don’t support the creation of a global city as we value our Randwick identity, local representation and existing quality services.”

I think we need to be celebrating our communities and their uniqueness and diversity not shunting them all into one basket under the banner of economics, the market or even efficiency. You cannot foster the innovation that this country is crying out for out of this ideology.

Councils have until the 18th of November to make a final submission to the NSW Government.

This article was originally published on Political Omniscience.

 

Is Uranium the Asbestos of the 21st Century?

After reading about incoming Chief Scientist Alan Finkel, and his interest in nuclear power today, I remembered that it wasn’t too long ago that Foreign Minister Julie Bishop said similar things of which I wrote about back in December 2014.

The minister for foreign affairs Julie Bishop, reignited the nuclear energy debate in Australia saying that it remains an option and a way to cut carbon dioxide (CO2) emissions after 2020. “It’s an obvious conclusion that if you want to bring down your greenhouse gas emissions dramatically you have to embrace a form of low or zero-emissions energy and that’s nuclear, the only known 24/7 baseload power supply with zero emissions,” she told Fairfax Media. A “baseload power supply” is basically a continuous power supply. “I always thought that we needed to have a sensible debate about all potential energy sources and, given that Australia has the largest source of uranium, it’s obvious that we should at least debate it,” she said.

In 2006 businessman and nuclear physicist Ziggy Switkowski, headed the Review of Uranium Mining Processing and Nuclear Energy in Australia (UMPNER). Mr Switkowski is mostly known for being the former Telstra CEO that oversaw the initial privatisation of Telstra. He stepped aside controversially in 2005 with a “golden handshake” two years shy of his contract ending amid share prices slumping, and the fallout from risky financial decisions. Recently he is back in telecommunications after nearly a decade when the minister for communications Malcolm Turnbull, appointed him as Chairman of the national broadband network (NBN) in October last year. Ms Bishop was minister for education, science and training and minister assisting the Prime Minister for women’s issues, in the Howard government when the UMPNER review was released. She expresses dismay at the end results of the review: “The debate didn’t go anywhere. It descended into name calling about which electorates I intended to place a nuclear reactor in, and would I rule out Cottesloe Beach – that kind of puerile debate. So it didn’t ever get off the ground,” she said. Mr Switkowski’s review was pro-uranium mining and pro-nuclear power but many critics did not agree and felt that the narrow terms of reference set by the federal government restricted the panel to a study of nuclear power, not a serious study of energy options for Australia. And that there was already existing research indicating that meeting energy demand and reducing emissions can be done with a combination of renewable energy and gas to displace coal, combined with energy efficiency measures, without needing to use nuclear power. Another critic Dr. Mark Diesendor said that the report has no basis for its claim and that: “Nuclear power is the least-cost low-emission technology …” “How can the panel assert that nuclear is least cost, when it has neither performed any analysis nor commissioned any on this topic? To the contrary, wind power is a lower cost, lower emission technology in both the UK and USA and would also be lower cost in Australia.”

After hearing Ms Bishop’s comments, Mr Switkowski said: “It’s a big call for our leaders to engage in this debate, but a good one because it will take some time for communities and industries to get comfortable again with the current and future generations of nuclear technology.” He is of the belief that Australian community sentiment has been warming since the Fukishima nuclear disaster in Japan in 2011, where the aftermath is ongoing, with 100 thousand people still displaced. The disaster occurred due to a major earthquake and a 15-metre tsunami that disabled the power supply, cooling three Fukushima Daiichi reactors causing the accident. Mr Switkowski appears to have his hopes pinned on advances in Small Modular Reactors (SMR), which are part of a new generation of nuclear power plant designs being developed in several countries. “The small modular reactors will provide a real opportunity to consider nuclear power again because they are a tenth of the size of a nuclear or coal-fired powered station.” He also hoped that they could address concerns most people held about the reactors being waste, their closeness to residential areas and the risk of accidents such as the Fukishima or the Chernobyl nuclear power plant catastrophe in 1986. He admits however, that if there were improvements in wind and solar technology over the next twenty years, renewable energy sources could be more viable. “It’s a bit of a race, given the time that’s been lost due to Fukushima,” he said.

I would hope that we are on a race to come up with the best alternative energy options including renewable energy, rather than putting all of our eggs into one nuclear basket.

The 5th Annual SMR conference in Washington D.C. was held in May this year. Senior Policy Adviser, National Resources Defence Council (NRDC) Christopher Paine, commented that “no speaker even mentioned the swiftly emerging reality that in 2025, potential SMR deployments will be competing against cleaner simpler renewable electricity plus energy storage systems – nuclear power will no longer be able to market itself by playing on customer fears of the “intermittency” of renewable energy sources.” Mr Paine also noted that no presenters at the conference had made a case that the economics of an SMR power plant would be better than those of an advanced conventional nuclear plant. On average a nuclear plant takes between 5-7 years to build, not including the planning and licensing. The initial outlay is very high and up to 75% total of it’s lifetime which is around 40-60 years. Exact figures for the construction of nuclear power plants are often commercially sensitive and hard to provide. Recent examples in the United States though have been priced from $5-$12bn per reactor over a relatively short construction time span. Even though the running costs of a nuclear plant are fairly low, the upfront costs associated with the construction and financing of it make it much more expensive than fossil fuel power, or coal. Mr Paine mentioned “energy storage systems”, this would solve the “baseload power supply problem” that is used to explain why nuclear is better than renewable energy. In fact, the University of Technology Sydney (UTS) researchers are working on new battery technology promising more efficient and affordable solar and wind energy. The three year project has received a $750k investment from the Australian Renewable Energy Agency (AREA) as well as $1.24m industry support. “The focus of this project is to find a storage solution. Solar energy is not continuous; it is only when you have sunshine that you can generate electricity. The same goes for wind and other renewable energy sources. We intend to develop a rechargeable battery that can store these renewable energy sources and make them available for later use.”

Australia supplies between 12-20% of the global market and we have around 30% of the world’s reserves of uranium. Prior to the Fukushima disaster, Japan bought around 2,400 tonnes of uranium from Australia, our second largest market next to the European Union. The former Japanese Prime Minister Naoto Kan, came to tour Australia this year at the end of August for a week and to campaign for large-scale renewable energy. It’s of note that the current Prime Minister Shinzo Abe visited Australia and where he addressed the Australian Parliament a month before hand. Mr Kan, a trained physicist, was once convinced that nuclear power was the future but this changed in March 2011 with the Fukushima nuclear disaster, when he faced the prospect of evacuating 50 million Japanese citizens from their homes. “Japan as a country would have lost its capability to function for decades,” he said, adding that only luck and “the mercy of God” stopped the crisis from reaching such a scale. He started his tour in the Northern Territory (NT), where the Ranger uranium mine is located, and most likely the source of some of the uranium oxide that found its way to the Fukushima plants. Energy Resources Australia (ERA) and it’s majority owner, Rio Tinto, won’t confirm this, citing commercial confidentiality. What is known is that Australia was the largest supplier of uranium to Japan; ERA produces more than half our uranium ore; and that Canberra’s nuclear safeguards office confirmed in October 2011 that Australian uranium was present in the Fukushima plants. Mr Kan doesn’t doubt some of Fukushima’s pollution originated at Ranger. ERA insists it abides by the world’s best environmental safeguards and practises, that are policed by both the NT government and the federal government’s supervising scientist, who is the federal regulator of the site. There has been more than 200 safety breaches and incidents over the past 30 years at the site, according to the Environment Centre NT. The worst one to happen was last December and the third mishap that month, when a leach tank with a 1.5 million litre capacity burst and spilled out a radioactive and acidic slurry. Mine operations were closed for several months before the Abbott government declared no harmful effects had been detected from the spill.

The traditional owners were opposed to the mining of uranium on the site, yet a 1976 act of Parliament allowed mining to go ahead on Mirarr lands anyway. Justice Russell Fox, the chair of the evironmental inquiry into Ranger, and who recommended that the mine go ahead also noted that “the evidence before us shows that the traditional owners … are opposed to the mining of uranium on that site”. Nevertheless, he said, “we form the conclusion that their opposition should not be allowed to prevail”. He also expressed hope that the mine would improve the “general happiness and prosperity of the region”, he also acknowledged that “the arrival of large numbers of white people … will potentially be very damaging to the welfare and interests of the Aboriginal people there”. Based on his recommendations, the Kakadu National park came to be, with its boundaries carefully drawn to exclude the Ranger site. Toby Gangali, was a Mirarr man, and his documentary was shot more than thirty years ago, and was shown to former Japanese PM Mr Kan during his visit. Mr Gangali talked of ancient sacred sites nearby, and of his fears that “something might go wrong if the mine goes ahead … snake might come … big rainbow … he might kill all over the world”. Downstream from Ranger, inhabitants of the small Aboriginal settlement of Mudginberri are worried about what the mine may one day send their way. Mark Djandjomerr and May Nango, who spoke through an interpreter, said they live in “constant fear there could be an accident. We know that a lot of jobs have been created by the mine. But we are the people who have to live downstream from it, we are always frightened something could go wrong”.

As traditional landowners, the Mirarr take responsibility for the impacts that activities such as mining on their land, has on others. The possibility of uranium being incorporated into a nuclear weapon or present at the site of a nuclear accident is of enormous concern to Mirarr. In April 2011, after the Fukishima disaster, Yvonne Margarula wrote to UN Secretary-General Ban ki-Moon and expressed her sorrow at the impacts radiation was having on the lives of Japanese people. She noted that, ‘it is likely that the radiation problems at Fukushima are, at least in part, fuelled by uranium derived from our traditional lands. This makes us feel very sad. It was confirmed by Dr Robert Floyd, Director General of the Australian Safeguards and Non-Proliferation Office of the Department of Foreign Affairs and Trade (DFAT), that, “Australian obligated nuclear material was at the Fukushima Daiichi site”.

David Sweeney is a long-standing nuclear free campaigner with the Australian Conservation Foundation and he poignantly said: “Australia did not stop extracting and exporting asbestos because we ran out of the resource, we stopped because the resource ran out of social license and the companies involved in this toxic trade ran out of excuses. The same will happen with the uranium sector.”

We do have a moral obligation and a humanitarian responsibility for the potential hazards posed by the uranium we sell. Once it leaves our shores, there are so many dangerous risks that we are taking and the ramifications of proliferation, nuclear waste and nuclear disasters could all have catastrophic impacts, on not just our country and economy but our neighbour’s countries and economies.

Japanese PM Shinzo Abe’s government, is set to restart at least two nuclear power plants operated by Kyushu Electric Power early next year, but is facing resistance from local lawmakers concerned that the evacuation plans in the event of an accident were inadequate, as one example. Other power companies would like to follow Kyushu Electric Power’s lead and reopen reactors next year, however many of the nation’s 48 reactors are aging or located in seismically sensitive zones. In a poll conducted in October 18-19 this year by Kyodo News, 60% of respondents said they were against restarts, while 31% were in favour. Japan has also just re-entered a recession and is using quantitative easing as an economic measure to counteract it, which I have written about as well and the link is included in this sentence for ease. When Mr Abe made his case in late 2012 that he was the man to save the economy and revive Japan, including tackling Japan’s national debt, which currently stands at around 240% of their Gross Domestic Profit (GDP); voters handed him a landslide win. Just two years on out of a four year term, Mr Abe has dissolved the Japanese government and declared a snap election for December 14th this year. “We cannot”, he thundered, “let this chance go.” Many Japanese think they are being asked to buy the same horse twice. Mr Abe’s popularity has tumbled from the levels that he enjoyed early on and analysts believe he is seeking another four-year term now before issues begin next year over defence policy and the restarting of Japan’s closed nuclear plants and more grow.

Prices for uranium however have been depressed since the nuclear crisis in Japan in 2011 and most of the Australian uranium miners haven’t made a profit since then. Exploring all of the sides of nuclear energy is pause for thought, before we can even contemplate using nuclear energy in Australia. That is not to say that we can’t keep on exploring better ways to harness nuclear energy safely, because let’s face it, it’s great emission wise, just really bloody dangerous, but it would be great as a back up plan. We can never have too many of those.

This article was originally published on Political Omniscience.

 

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Australia Post cannibalising mail and print for its own benefit

On August the 28th Australia Post (AustPost) applied to the Australian Competition Consumer Commission (ACCC) to increase not only the price of a stamp from seventy cents to one dollar but business mail pricing of up to 48% from January the 4th. This is on top of price hikes of 5-9% for Print Post, which is used to post publications such as newspapers, magazines and catalogues, let alone bulk mail price rises of 2.8-5% this month as a CPI increase. There was wide spread industry concern that AustPost would use the 42% stamp price increase as an excuse for business mail rises next year, it seems they had good reason to be concerned.

AustPost wants small pre-sort mail, being the category most used for bulk mail and is 38% of mail volume, to rise 37.5% for the regular service and 48.5% for the priority service. They also want to raise Print Post again by 15% for the priority service under 125gm and 13% for the rest, with the regular small service up 13% and the rest at 11%. A couple of days later the Print Industry Association of Australia (PIAA) launched a planned and researched national campaign to win political support for AustPost reforms. PIAA CEO Jason Allen, said “The price increase issues are a major concern and they are the tip of an iceberg threatening the future viability of the entire mailing industry and all the associated sectors whose economic livelihoods are under threat by Post’s blindsiding tactics,” and that “Post has consistently failed to consult and to make an economic and social business case substantiating its actions. It has failed to highlight any improvements and benefits that businesses would be expected to provide their clients with accompanying any price increase. We believe it has failed to meet the criteria of the Australian Government’s Cost Benefit Analysis. It has avoided quantifying the impacts of its actions across the community and failed to provide economic and social evaluation in monetary terms of its proposed actions.”

Mr Allen believes that it is the duty of the Parliament to hold AustPost to account and that his campaign is geared to do this “From the end of this week politicians around the country will be receiving our report on the Economic Contribution of the Australian Mailing Industry and our plea to pull this monopolistic, national service provider into line and into compliance. Members of Parliament need to understand the consequences of Posts actions on the employment of as many as 150,000 people who contribute $14.1 billion in Gross Value Added to the Australian economy not just the 30,000 people Australia Post employs” he said.

Subsequent meetings over the first couple of weeks of September were held with printers and mail-houses in Sydney and Melbourne, and they have thrown their support behind the campaign. Mr Allen also said they would be making a substantial industry submission to the ACCC for the Thursday 15th October 2015 deadline. On the 17th September the AustPost newsroom announced that they would establish a new industry working group to support the implementation of letters regulatory reform and consider other strategic issues facing the postal sector. The group, is to be chaired by former Victorian Senator Helen Kroger, and will include representatives from the printing industry, mail houses, licensed post office (LPO) network and employee unions. This was actually a recommendation from a Senate inquiry from a year ago into the LPO network, wanting the establishment of a strategy group of industry stakeholders. The inquiry also recommended restoring the ACCC oversight of business mail price changes and an independent review of AustPost’s community service obligations.

Interestingly Ms Kroger is the former wife of Michael Kroger who is currently the Liberal Party state President of Victoria. In 2012 Ms Kroger was bumped from first place on the Senate ticket by Mitch Fifield, who was recently made Minister for communications taking over from the current Prime Minister, Malcolm Turnbull. In January this year when Mr Turnbull was communications MP, he made it clear that AustPost was not establishing the government’s digital shopfront. He conceded his e-government plans “undermines the economics of my other responsibility – Australia Post” but that this was inevitable because “the letters business doesn’t have a great future”.

AustPost obviously wants to position its self as digital innovators with the AustPost Digital Mailbox cloud storage launched in October 2012, and to focus on parcel deliveries with its acquisition of Star Track Express couriers in December 2012. Many found it curious when they decided to move away from the famous red and white logo for blue and white when they rebranded its parcel division and the Star Track fleet last year. AustPost also launched an iPhone app in 2012 called Australia Post Postcards, allowing you to send images from your phone as postcards anywhere in the world. “Australia Post is continually looking for ways to make our products and services a helpful part of our customers’ lives both physically and digitally” said Catriona Larritt, the former Australia Post’s General Manager Post Digital, at the time. It has come out this year though that the app has many problems such as long delays for the cards to arrive or them not arriving at all.

In 2013 Ms Larritt said that if the Digital Mailbox was successful, it would accelerate the decline of its letters business and that it was a question she was often asked. “The answer is yes, it’s clear that if we’re successful, over the next couple of years we’ll accelerate the decline of letters.” And “That obviously will have a material economic impact on Australia Post, but we made a decision as a business that this was happening anyway and we may as well cannibalise our own business rather than have someone else do it to us. That was a hard decision organisationally”. But Ms Larritt also said that there were billions of letters still sent, so for the next three to five years it would be about ramping up the migration to the Digital Mailbox and “providing a multi-channel communications offer”.

In April this year AustPost launched its new Apple watch app that enables customers to view delivery information and track their parcels on an Apple Watch. “The new Apple Watch app is the latest in a series of digital innovations Australia Post has been working on to provide easy to use experiences for customers who want greater flexibility in management delivery services” Andrew Walduck, executive general manager, information & digital technology at Australia Post, said in a statement. Also in April it was revealed that AustPost’s state of the art sorting machines had misdirected an estimated 40,000 parcels each day. And in May this year it had a meltdown in its computer system leaving millions of online bill payments frozen meaning companies were unable to receive customer payments for a week.

A week ago they came out with a campaign to help small businesses reach international as well as local audiences through e-commerce. And as of yesterday, Mr Walduck will now head the new ‘trusted e-commerce solutions’ division. AusPost CEO Ahmed Fahour, said of the move “We are increasingly clear that trusted services opportunities within e-commerce, which we have been deliberately and carefully investing in over the past four years, are core to our future business”.

Physical business mail such as direct mail still has its role in marketing and advertising, variable data printing is a great example of this. This technique is favoured for elections, charities and business. It is clear Mr Fahour has heavily invested in digital and parcels and wants to take AustPost in that direction now, he is not interested in letters or bulk mail. Wanting something and their being successful are two completely different things as we have seen with the numerous digital glitches quoted above. AustPost admitted in 2013 that they cannibalised their own business which has brought about an even faster decline in letters. Let’s also not forget the fact that these price hikes affect 150,000 people who contribute $14.1b in gross value added to the economy not just the 30,000 that Mr Fahour employs. In business it’s generally best to nail down what you are good at before you branch into other areas, and they are struggling with logistics which should be their core market. In my own personal experience their parcel division leaves a lot to be desired and is a common joke between my customers and other suppliers. I’m also not sure about their return on investment (ROI) with their Apple app either. A very small segment will own them and will they care enough to download it to track parcels considering their web version of this also leaves a lot to be desired?

Digital marketing embraces traditional such as print and billboards and uses these channels to direct you to online offerings. Magazines, as well as catalogues are also still popular and viable, which I think is at least partly due to only being able to read so much with artificial light. This is also why I think books will survive.

Until we live in the offline world Tron style, the digital world and the physical offline world should be complimentary.

This article was originally published on Political Omniscience.

 

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What does ChAFTA really mean for Aussie jobs?

The Chinese-Australia fair trade agreement (ChAFTA) began negotiations in May 2005 with the agreement formally signed on the 17th July 2015, by Australian Minister for Trade and Investment, Andrew Robb and the Chinese Commerce Minister, Gao Hucheng. The ceremony was witnessed by Australian Prime Minister, Tony Abbott who described the signing as a “momentous day” for the Australian-China relationship. “It will change our countries for the better, it will change our region for the better, it will change our world for the better,” Mr Abbott said. He paid tribute to Chinese President, Xi Jinping whom he described as a “shrewd” negotiator and “friend of Australia”. He further toasted the deal saying “I trust that today our Chinese friends will enjoy the fine beef and the good wine that will soon be more readily enjoyed by their countrymen.”

Last year was a busy year for the Abbott government, which also signed off on the Korea-Australia free trade agreement (KAFTA) and the Japan-Australia Economic Partnership Agreement (JAEPA). According to a Department of Foreign Affairs and Trade (DFAT) report titled, Economic benefits of Australia’s North Asia free trade agreements, it will create lots of new jobs. It has estimated that between 2016 and 2035 the FTAs will lead to 178,000 jobs, at an average of 9,000 per year. Mr Robb also enthused the three FTAs job creation, saying that “Given what’s going on in the region, the extraordinary explosion of people going into the middle class, this is a landmark set of agreements, and it will see literally billions of dollars, thousands, hundreds of thousands of jobs, and will underpin a lot of our prosperity in the years ahead.”

The report also forecast an additional GDP increase between 2016 and 2035 of $24.4 billion and a boost in real consumption of $46.3 billion, equating to an increase in household consumption of nearly $4,500. This has been questioned by the Australian Fair Trade and Investment Network (AFTINET). It said the study authors were “consultants which produced wildly optimistic estimates of benefits for the Australia-US FTA (AUSFTA) which did not eventuate.” Ten years on it’s still unclear as to what benefits the American-Australian FTA has had for Australia or even America.

The Australian Council of Trade Unions (ACTU) is worried about how the deal will affect local jobs and unemployment levels. There is the ChAFTA and there is a memorandum of understanding (MOU) document, about an Investment and Facilitation Agreement (IFA), that was signed before the formal signing. An IFA is a project to be established between the Department of Immigration and Border Protection (DIBP), or its equivalent, and a project company. A project company is eligible to establish an IFA where:

  1. (a) A single Chinese enterprise owns 50% or more of the project company; or, where no single enterprise owns 50% or more of the project company, a Chinese enterprise holds a substantial interest in the project company;
  2. (b) There is a proposed infrastructure development project (“the project”) by the project company with an expected capital expenditure of $A150 million over the term of the project;
  3. (c) The project is related to infrastructure development within the food and agribusiness; resources and energy; transport; telecommunications; power supply and generation; environment; or tourism sectors;
  4. (d) The project company is registered as a business in Australia;
  5. (e) The project company agrees to comply with all Australian laws and regulations, including applicable Australian workplace law, work safety law and relevant Australian licensing, regulation and certification standards; and
  6. (f) The China International Contractors Association (CHINCA) and the Department of Foreign Affairs and Trade of Australia (DFAT) have recommended the project and the project company meet the criteria in paragraphs 2(a) through 2(e).

Section four, covers the areas of negotiation for DIPB and the project company, which includes –

  1. (a) The occupations covered by the IFA project agreement;
  2. (b) English language proficiency requirements;
  3. (c) Qualifications and experience requirements; and
  4. (d) Calculation of the terms and conditions of the Temporary Skilled Migration Income Threshold (TSMIT).
  5. The project company may be asked to provide additional information by DIBP in respect of its requests for concessions in the above areas. Other than the areas referred to in paragraphs 4(a) through 4(d), the grant of visas will be subject to meeting all other Australian nomination and visa requirements.

Interestingly the ChAFTA Myths versus realities released by DFAT only mentioned option 2. (b), most likely because it fits in with the infrastructure narrative. The “concessions” also aren’t mentioned but imply that the project company can negotiate a private contract with DIPB, to import Chinese workers on projects in lower skilled occupations. Though workers under the 457 visa scheme are required to be paid above TSMIT and possess a certain amount of English ability, this also looks like it can be negotiated under the IFA.

In paragraph six it states – There will be no requirement for labour market testing to enter into an IFA. The IFA is valid for four years from the date of execution and with the possibility of an extension. In the actual ChAFTA itself, in Article 10.4: Grant of Temporary Entry, it states – In respect of the specific commitments on temporary entry in this Chapter, unless otherwise specified in Annex 10-A, neither Party shall

  1. (a) Impose or maintain any limitations on the total number of visas to be granted to natural persons of the other Party; or
  2. (b) require labour market testing, economic needs testing or other procedures of similar effect as a condition for temporary entry.

Here is the ChAFTA side letter between Mr Robb and Mr Gao after the formal signing of ChAFTA, that provides more detail and states –

Australia will remove the requirement for mandatory skills assessment for the following ten occupations on the date of entry into force of the Agreement. And that the aim is to further reduce occupations or eliminate the requirement within five years.

Automotive Electrician [321111]

Cabinetmaker [394111]

Carpenter [331212]

Carpenter and Joiner [331211]

Diesel Motor Mechanic [321212]

Electrician (General) [341111]

Electrician (Special Class) [341112]

Joiner [331213]

Motor Mechanic (General) [321211]

Motorcycle Mechanic [321213]

Alan Hicks of the Electrical Trade Union (ETU) said that the Government’s decision to remove the mandatory skills assessment for Chinese workers in ten occupations was a disgrace. “For the Federal Government to come out and waive that under a free trade agreement, without any consultation with unions or employers, is an absolute disgrace,” he said. “It’s going to create significant workplace dangers, not only just for electricians, but all those people who use electricity.” Mr Hicks said China’s statistics of workplace deaths was of “genuine concern” to Australians. “Australia leads the way in electrical safety. We’ve got some of the best electrical workers in the world. A lot of countries aspire to have the same level of safety standards that we do,” he said. “We’ve got a licence system right across the country – no matter which state or territory you work in, you’ve got to be licensed to carry out the work – and those sorts of systems aren’t in place in other countries like China. Mr Hick’s also said that “And China has a woeful workplace health and safety record. They have over 70,000 workplace deaths a year, so we are genuinely concerned.”

There is also a ChAFTA DFAT factsheet that says – In order to better facilitate the temporary entry of workers associated with trade and investment, Australia and China will also increase cooperation in the areas of skills recognition and licensing, including through encouraging the streamlining of relevant licensing procedures and improving access to skills assessments.

Besides the Abbott government’s ideologies being against the work of the unions, it’s unclear as to why industries relating to the ten different occupations including employers, weren’t consulted. In the ChAFTA Myths versus realities document, it tackles untrained Chinese electrician worries, but it doesn’t mention doing away with the mandatory skills assessments or mention the total amount of visas on offer. The ChAFTA agreement also enables an Executive arm of government power that goes against the parliament’s 457 visa bill in 2013, where employers, are expected to conduct labour market testing.

The Chinese government’s response to ChAFTA through correspondence with Mr Robb is clear – I have the further honour to confirm that my Government shares this understanding and that your letter and this letter in reply shall constitute an integral part of the Agreement. What any of this means in the long term, in regards to state and federal industrial laws remains to be seen. But it does look like an overreach by the Abbott government in regards to executive power, with the Minister for Immigration and Border Protection, Peter Dutton, deciding matters without employer input, let alone employees, the opposition or workers. It also has the faint scent of Work Choices, an unpopular set of federal industrial laws brought about by former Prime Minister, John Howard in 2006. Taking the power away from workers, over employers in your own country is one thing but taking on China’s is another. The IFA seems to enable these features, and how this will impact on local employment in Australia, also remains to be seen.

Either which way, training needs to be involved, and concessions made solely by Mr Dutton, is not enough to allay justifiable fears from the Unions and Australian’s looking for jobs in the areas of – Food and Agribusiness; Resources and Energy; Transport; Telecommunications; Power supply and generation; Environment and the Tourism sectors. The other question is, if it’s just a matter of training Chinese workers in Australian regulations etc; who is providing this training and how long does it take? And lastly, is there options for Australian’s who have the skills but don’t speak Mandarin and so on?

This article was originally published on Mel’s blog Political Omniscience.

 

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Housing inequality needs urgent addressing

Inequality and the divide between the rich and the poor has become a buzzword of sorts in recent years, with the likes of Occupy Wall Street (OWS) and even multinational corporation owner Rupert Murdoch using it in a Group of twenty (G20) Washington speech for the International Monetary Fund (IMF) in 2014. The host of the 2014 G20 and Australian Prime Minister Tony Abbott has been loathe to even mention the word. Hugh Jorgensen, a research associate at the G20 Studies Centre in the Lowy Institute for International Policy, made the point that “inequality” was hardly mentioned in official G20 reports while Australia was in the chair. “Of the 60-plus official meetings that have taken place under Australia’s 2014 G20 presidency, a grand total of one has managed to produce a final communique or meeting report that mentions the word ‘inequality’. To be fair, it does mention it twice: the 10-11 September declaration of G20 Labour and Employment Ministers first notes that ‘tackling inequality (is a priority) for all our economies’ and then designates it as an issue for future employment working-group discussions,” Mr Jorgensen wrote. “Yet on a purely public relations basis, the absence of more explicit references to inequality thus far seems to be oddly out of step with global momentum around the issue.” What Mr Abbott has said on it is: “in the end, we have to be a productive and competitive society and greater inequality might be inevitable.”

It is well known that Mr Abbott is a big fan of former United Kingdom (UK) Prime Minister Margaret Thatcher and has adopted many of her ideologies. One of these being the concept of trickle-down economics, this was also a central policy for former American (USA) President Ronald Reagan. I have previously written about the trickle down concept here. It is also starting to become known that the concept has failed and has created inequality and has actually negated economic growth. The Organisation for Economic Cooperation and Development (OECD) reported last December that the UK economy lost nearly ten percent of growth between 1990 and 2000 due to the rise of inequality. The OECD also reported ten percent less growth in New Zealand and Mexico, nine percent less in Finland and Norway and between six and seven percent less in the USA, Italy and Sweden. At the World Economic Forum (WEF) in January this year, Oxfam warned that the combined wealth of the richest one percent will overtake that of the other ninety-nine percent of people in 2016 if the current trend of rising inequality is left unchecked.

In Australia, fears of a housing bubble, particularly in New South Wales (NSW) have been bandied about in the mainstream media for a while now, but there has been genuine concerns recently that NSW is at least in bubble territory. The Governor of the Reserve Bank of Australia, Glenn Stevens said in February this year that affordable housing has become a “major” social issue. And just last week he was quoted as saying “Yes I am concerned about Sydney, some of what’s happening is crazy.” Treasury Secretary, John Fraser has also recently raised concerns about the amount of money being poured into the housing market with such low interest rates. “When you look at the housing price bubble evidence, it’s unequivocally the case in Sydney. Unequivocally,” Mr Fraser told a Senate committee. He also said “Frankly, whatever the data says, just casual observation can tell you it’s the case.” And that “It does worry me that the historically low level of interest rates are encouraging people to perhaps over invest in housing,” Mr Fraser said.

The Australian Institute (TAI) released their research in March this year on inequality in the housing market titled The great Australian lock out. It found amongst other things that house prices have increased faster than incomes. Incomes are fifty-seven percent higher than a decade ago but house prices have risen by sixty-nine percent. Australia has the second most expensive property market of advanced economies when measured against incomes and rent. Interestingly only Norway is more expensive and they’re having their own problems with rising house prices and fears of a housing bubble at the moment.

The TAI research also found that home ownership rates have declined for all age groups and that all age groups are renting more and holding mortgages for longer. Nineteen percent fewer Australian’s own their houses outright in 2012 than they did in 2002. This includes ten percent from lower income households, a large decrease as only a quarter owned homes to begin with. Middle class households saw a similar trend with ownership falling by ten percent and those with mortgages falling by nine percent. This reflected a drop of around a quarter of 2002 percentage levels for mortgages and a third for home ownership.

When TAI examined age groups and home ownership they found that the largest decline in outright home ownership was for those aged 40 – 69-year-olds with an average drop of sixteen percent. The proportion of people with mortgages later in life increased in 50 – 59-year-olds with a drop of fourteen percent. It’s also worth noting that fifteen percent of retirees continue to rent, and Household, Income and Labor Dynamics in Australia (HILDA) data shows that seventeen percent of retired women are more likely to rent compared to twelve percent of men. The number of older women who rent increased by three percent over the ten-year period while the proportion of older men renting dropped by two percent. This also raises concerns of a potential gender gap amongst older Australians.

Another paper from TAI titled Income and wealth inequality in Australia found that a single homeowner on the pension is sixty-seven percent above the Henderson poverty line, while a single renter is only fourteen percent. A home owning couple on the pension are fifty-four percent above the line, while a couple who rent are only sixteen percent above.

The HILDA data also shows that eighty-one percent of investors are high income earners and that the majority already own their family home. Lending to property investors and existing homeowners has also soared. Lending to housing investors in 1994 was $15bn and was roughly equal to the lending of first home buyers. It increased in 2014 to around $120bn. Government policies heavily favour investors and existing homeowners and they receive ninety percent of the benefits from policies, with renters receiving hardly benefits at all. In effect the wealthy are not only contributing to pricing others out of the market but they are also the ones benefiting the most from government policies.

For example, the negative gearing policy, it allows investors to deduct losses occurred on their investment property from their taxable income. It also reduced government tax revenue by an estimated $6bn in 2014-2015. Negative gearing also has the effect of increasing the prices of houses. The majority of investors buy established properties, placing pressure on house prices and pushing them up while also pushing out would-be first homeowners. This results in a redistribution of wealth towards those who own real estate and those that don’t.

The Capital Gains Tax (CGT) policy is another concern as it’s a fairly light taxation applied to capital gains on investment properties. Investors who have held a property for more than twelve months are entitled to a fifty percent discount on any taxes levied on capital gains when they sell. This can encourage investors into strategies that make losses in the short term but that generate long term capital gains. Homeowners also benefit from the CGT policy through the tax system with the family home exempt, making owner-occupied housing one of the most tax advantageous forms of assets. Government spending on homeowners, primarily through tax concessions is $36bn per year. The Murray Financial System Inquiry report came out in December last year and specifically argued that the federal government needs to rein in the favorable tax treatment of investors as it “tends to encourage leveraged and speculative investment in housing.”

Renters on the other hand receive very little government support. Rent assistance is available to those on welfare benefits, such as Newstart, a recent review however has found that it hasn’t kept pace with the growth in rent prices. For example, rent assistance increased by forty percent between 2001 and 2013, yet median rents for those who receive it increased by between sixty-five and one hundred percent. In regards to housing stability for renters this is quite low with residential tenancy rules heavily favouring landlords.

The 11th Annual Demographia International Housing Affordability Survey 2015 found that housing in Australia was “severely unaffordable”, while Sydney (the capital city of NSW) was rated the 3rd least affordable market across eighty-six major markets in nine countries.

In NSW stamp duty for a property that’s worth over $1m is set at $40,490 plus $5.50 for every $100 by which the value exceeds $1m. The latest figures from the NSW Office of State Revenue show that in May the government raked in a record $518m from residential transactions to bring the total so far for 2014-15 to $5.1bn. NSW Premier Mike Baird says that the state government has increased housing supply but according to Bill Randolph, the director of the City Futures research centre at the University of NSW, increasing supply is not the whole answer. “House prices are determined in the market as a whole and new housing is only about 2 per cent additions per year,” Professor Randolph said. “So you would need to flood the market with new supply to do anything about house prices.” And that “There’s been several authoritative reports internationally that show there’s no clear supply side mechanism by which you could produce enough to reduce house prices significantly,” he said. A spokesman for Mr Baird, said in the year to April, there were 55,666 dwellings approved in NSW – the strongest result since May 1995. Out of last year’s windfall tax receipts, including $4.7bn in stamp duty, only $83m was allocated to an infrastructure fund to support new housing in NSW.

New research for 2015 property intention recently conducted by Roy Morgan Research, shows that over the next year that out of 309,520 Sydney property intenders (seventy-one percent) are planning to buy an established home or apartment. And that half as many (thirty-eight percent) want to build or buy a new home.

Housing inequality needs to be looked at holistically, the policies, the supply side of things and where things are headed for renters, in particular lower- and middle-income households, and older Australians renting in their retirement. The government has a few narratives going at the moment but the one they appear to be pushing is that ending the negative gearing policy will push rent prices up in Sydney. Even though this was discounted recently on the Q&A program by John Daley, the Chief executive of the Grattan Institute. He asked the Treasurer of Australia, Joe Hockey why he hadn’t abolished negative gearing. He replied that when former Prime Minister, Bob Hawke did it in the 1980s “you saw a surge in rents and those people who were paying rents are usually – not always, but usually – people that can’t afford in many cases to buy their own homes”. Mr Daley replied that it was absolutely true that rents went up fast in Sydney, “which might have been there wasn’t a lot of housing being built in Sydney in the couple of years previously”. “But look beyond Sydney and rents were dead – barely moved in Brisbane, didn’t go up very far in Melbourne, didn’t go up very far in Adelaide. They did go up very fast in Perth which makes you suspect very strongly that the race memory we have of abolish negative gearing, that rents will go up, is a race memory built on Sydney.” Mr Daley then succinctly said rents shouldn’t go up because “by definition what happens at the auction is that the investor doesn’t win the auction but someone who wants to live in the house does. Net impact, there is one less renter and there is one less rental property. Net impact on the rental market, zero.”

Palming it off as a state and land issue is irresponsible and if things are left as they are the housing bubble will burst and fester. Inequality in all of its forms is the byproduct of the trickle-down concept, the idea that generous tax concessions and what the wealthy spend on, will trickle down a few treats to the rest of us even sounds absurd. How does investing in classical cars or jewelry for example benefit the rest of us? We need investors but it needs to be reined in so that we don’t see what has happened in the UK, happen here. Granted we don’t have the complexities of being a tax haven that they have, but at the moment the average price for London housing is over £500,000 which works out to be just over $1m Australian dollars. The median price for a Sydney property this year is $914,056, a rise of 3.6 percent over the quarter, and sixteen percent over the year. We live in a global economy and wouldn’t it be prudent to have a genuine discussion with the UK and even Norway to find solutions for housing inequality, and not cherry picked aspects of it repeated ad nauseum by mainstream media for political advantage? We are only just starting to see what inequality does to the global economy, and it means less economic growth, which is bad for everyone including the wealthy.

This article first appeared on Melanie ‘s blog Political Omniscience.

 

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The chilling reality of the TPP

The TPP was conceived in 2003 as the Trans-Pacific Strategic Partnership Agreement (TPSEP) as a path to trade liberalisation in the Asia-Pacific. The original participating countries were Chile, New Zealand and Singapore with Brunei joining in 2005. In 2008 the United States of America (USA), Australia, Peru and Vietnam joined, followed on by Malaysia, Mexico, Canada and Japan. China and Korea have expressed interest but the USA did not bring it up when President Barrack Obama last visited the Chinese President Xi-Jinping in November 2014. This was puzzling to most as the USA has made so much of the TPP and it’s nervousness about China’s growing might economically and militarily.

Free Trade Agreements (FTA) deal mostly with goods being imported at a certain price as long as certain environmental and labour standards are met. What’s different about the TPP is that the treaty has 29 chapters, dealing with the whole scope of tariff and agricultural quota removal and market access on sensitive products, but in particular agricultural goods. It also includes provisions over nontariff issues such as intellectual property rights, the environment, state-owned enterprises, and investment. Japan was the last to join in 2013, and agriculture as well as the auto industry has long been a sticking point in Japanese trade liberalisation and held up the TPP negotiations with the USA. However recent agricultural reforms by Japan’s Prime Minister Shinzo Abe has tipped the power of balance back into the governments favour and away from Japan’s most powerful farm lobby, the Japan Agriculture Cooperative (JA). In January this year Japan offered to import more rice from the USA while keeping existing tariffs in place, and the USA agreed to stop demanding that Japan ease its car safety standards. In early February this year, progress was made on issues such as state-owned enterprises, environmental protection, and investment. This not only paves the way for greater market liberalisation and deregulation in Japanese agriculture but enables Mr Obama’s plan to “fast track” push for Congress approval to conclude the TPP within the year.

What is of the most concern is the provisions over not only the aforementioned non-tariff issues of intellectual property rights, the environment, state-owned enterprises, and investment but the Investor State Dispute Settlements provisions (ISDS). ISDS allows multinational corporations to sue governments if they’re deemed not to be acting in their best “interests”. It can potentially place limits on governments being able to develop their domestic laws and policies in areas such as public health, patents on medicine, the environment, food labeling, Internet use and privacy and even local media content. Australia for example is currently entrenched in it’s first investor-state dispute since November 2011 with Philip Morris Asia, due to the introduction of the ‘Tobacco Plain Packaging Act 2011′ (TPPA). The laws were introduced by the former Prime Minister Julia Gillard’s government, as a health measure but Philip Morris Asia amongst the many breaches, believes that it infringes their intellectual property. Previous Australian Labor Party (ALP) and Liberal National Party (LNP) governments have in the past only included ISDS in trade agreements with developing countries that don’t have investments in Australia and they weren’t included in the US-Australia FTA. American corporations are the most frequent users of ISDS and the “safeguard” clauses countries employ to protect themselves can and have been re-interpreted and over-turned through the arbitration process. Philip Morris International Inc in the Australian case for example is challenging the tobacco plain packaging legislation under the 1993 Agreement between the Government of Australia and the Government of Hong Kong for the Promotion and Protection of Investments (Hong Kong Agreement) by using its Asian arm to circumnavigate them.

The former Gillard government also decided to ban the inclusion of ISDS in future trade agreements, they didn’t think that it harmed investment as did the Productivity Commission. Even where corporations do lose they have dragged governments through lengthy and expensive legal processes with dispute settlement cases being heard by tribunals of three private-sector lawyers whose decisions are beyond appeal. The tribunals tend to be more concerned with assessing potential damage to corporate investments over the protection of government or public interest. There are more than 500 of these disputes being launched globally and more than $3bn being paid by out governments, meaning taxpayers, to corporations under existing US trade and investment agreements alone.

Not only is there strategic litigation employed by corporations but there is a concept known as “regulatory chilling”, which is the alleged case with Philip Morris Asia suing Australia for example, they’re able to put pressure on other countries considering plain packaging regulations too. According to Dr Kyla Tienhaara: “The Australian government has suggested that Philip Morris is currently engaged in trying to achieve global regulatory chill through its case by basically showing other countries that might want to introduce plain packaging legislation ‘Look what we’re doing to Australia.’ This is actually working because countries are saying, ‘We’re going to wait to find out what happens with that case before we go ahead with our regulations.”

Lone Pine Resources filed a $250m lawsuit against the Canadian government when Quebec placed a moratorium in June 2011, which was expanded into 2012, banning drilling and fracking processes for oil and gas underneath the St. Lawrence River, until a strategic environmental evaluation was completed. “Based on the principle of precaution, the Quebec government’s response to the concerns of its population is appropriate and legitimate,” said Martine Châtelain, president of Eau secours! (Quebec based Coalition for a responsible management of water). “No companies should be allowed to sue a State when it implements sovereign measures to protect water and the common goods for the sake of our ecosystems and the health of our peoples,” Ms Châtelain added.

Again back in Canada, they are popular with these disputes unfortunately, is the case of Eli Lilly and Company, which is an American global pharmaceutical company (and it’s fifth biggest). They filed a $500m law suit against Canada for violating its obligations to foreign investors under the North American FTA for allowing its domestic courts to invalidate patents for two of its drugs. Canadian courts found that there was a lack of evidence supporting the drug’s alleged benefits.

According to Forbes in 2013 the biggest profit margins produced be USA corporations were in the Pharmaceuticals, Banks, Car makers, Oil and Gas makers and Media industries. In 2013, US Pharmaceutical Pfizer, the world’s largest drug company, made 42% profit margin. As one industry veteran put it: “I wouldn’t be able to justify [those kinds of margins].” In the UK that year, there was widespread anger when the industry regulator predicted energy companies’ profit margins would grow from 4% to 8% for the year. Last year, five pharmaceutical companies made a profit margin of 20% or more, these were – Pfizer, Hoffmann-La Roche, AbbVie, GlaxoSmithKline (GSK) and Eli Lilly.

The problem isn’t just with the massive amounts of seeming profiteering but the fact that the drug companies spend far more on marketing drugs, in some cases twice as much, than on developing them. Johnson & Johnson (US) total revenue for 2013 was $71.3bn with a profit of 13.8%, it only spent 8.2% on research and development, yet 17.5% was spent on sales and marketing. Drug patents are usually awarded for 20 years, but 10-12 of those years are spent developing it at a cost of up to $2.5bn, leaving eight to ten years to make money before the formula can be taken up by generic drug companies. Once this happens, sales fall by 90%-plus. Joshua Owide, director of healthcare industry dynamics at research company GlobalData, explains, “Unlike other sectors, brand loyalty goes out the window when patents expire.” This is why pharmaceutical companies go to such extraordinary lengths to extend their patents, a process known as “evergreening”, employing “floors full of lawyers” for this express purpose, one industry insider has said. And with a drug raking in $3bn a quarter, even a one month extension can be worth a lot of money. Some drug companies, including the UK’s GSK, have been accused of more underhand tactics, such as paying generics to delay the release of their cheaper alternatives. This is a win for both industries, as it has been said that the loss of the big pharmaceuticals far outweighs the generic industries revenue.

What can all of this mean potentially for my native country Australia and more so in my current home state of New South Wales (NSW)? NSW regulations that prevent coal seam gas (CSG) recovery near residential areas could be subject to lawsuits if the TPP goes ahead with these murky investor-state dispute settlement provisions. If it affects their profit margin you can be assured that a lawsuit will eventuate as will tricks from corporate lawyers trained in this specific area. Australian Trade Minister Andrew Robb has assurances of a deal being finally struck within weeks. “Mid-February to mid-March: that’ll be, I think, the timeframe,” he said. “We might have to come back again to conclude some things, but that’s the intent. The final issues, as always, are the most difficult. But everyone seems to be in a mood to find some common ground so that we can get this major, major agreement off the ground.”

The current Australian government has an appetite for signing FTAS as seeming proof of their economic prowess. The TPP has been years in the making and fraught with difficult negotiations especially in regard to the ISDS provisions that could impact on us really hard, and we have barely even touched on them. The secrecy in an Australian political environment, let alone with a disillusioned public, couldn’t come at a worse enough time. I would think now is the time for the Opposition, Independents and the Senate to come together and put the public’s interests first and put it first every time, no matter the high level of Investment interest in our country. It is apparent that the current government wants to dismantle our Medicare and even introduce a medical tax. Can you imagine what could be in store for us if we allow multinational corporations or investors with trade ministers, not governments mind you, to ultimately decide our economies, laws and policies? I will leave you with the global spend on medicines projected to be worth up to $1.2 trillion for the year 2017.

This article was first published as ‘We can not allow the TPP with no transparency & clauses to sue us‘ on Mel’s bog, Political Omniscience.

 

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