John Quiggin

According to a report in the Courier-Mail, Queensland Treasurer Tim Nicholls has just announced the sale of seven government buildings in the Brisbane CBD. This transaction has all the dodgy features we’ve come to expect from Queensland asset sales

* The buyers are “assorted funds managed by the [state-owned] Queensland Investment Corporation”. So, as often seems to be the case, we are selling assets to ourselves

* Nicholls says “the sale proceeds will be used to reduce state debt. The government will also save about $130 million in interest payments.” Of course, this is double counting – the whole point of reducing debt is to save interest payments. But what does the $130 million mean? It’s about 24 per cent of the sale price, so I’d guess it refers to savings of 6 per cent a year over the four years usual in forward estimates. But that’s a very short-term way of looking at transactions that will affect the public for decades to come

* The buildings will be rented back on set leases with fixed rent increases. So, we’ll also be renting them back from ourselves. Costs will mount over time, but the big increases will doubtless be outside the forward estimates. So, there might be net saving for the next few years, but there will be losses after that.

And of course, as Shadow Treasurer Curtis Pitt points out, selling assets without a mandate was exactly what this government (elected because of Labor’s mandate-free asset sales) promised not to do.

As has been true since 2010, our aspiring leaders seem to be determined to outdo each other in silliness this week. Since Julia Gillard will (with 90 per cent probability) be nothing more than a bad memory in a year’s time, while Tony Abbott will be an unavoidable reality, I’m going to ignore Gillard’s “Rob Peter to Pay Paul” aprroach to funding Gonski and talk about the National Broadband Network.

The Abbott-Turnbull proposal for a cutprice NBN has been an amazing success in clarifying issues that previously seemed too complex to be resolved. Until now, it’s been far from obvious how to assess the NBN – the complaint that we didn’t have a benefit cost analysis was obviously silly in the absence of any easy way of quantifying the benefits. But now that we’ve seen the alternative – a 25MBps network, dependent on Telstra’s failing copper network and non-existent goodwill, it’s obvious that the NBN is the only option that gives us any hope of keeping up with the steady growth in demand for information. The claim that individual subscribers can choose to upgrade to fibre-to-the-premises appears to have collapsed in the face of expert scrutiny. Instead, it seems, we’ll end up with lots of street-corner boxes, which will have to be ripped out and replaced wholesale when their inadequacy becomes apparent.

Given that he is going to win the coming election anyway, Abbott could greatly improve his chances of re-election in 2016 by admitting his mistake and going with the existing NBN plan, maybe with some cosmetic tweaks. As a bonus, from Abbott’s POV, Turnbull would have to eat a lot of humble pie.

The same is true for the other slogans on which he’s relied so far, like “Stop the Boats’ and “Axe the Tax”. Thanks to Labor’s implosion, he can afford to dump them now, and replace them with something more realistic – there’s no shame in changing policies before an election.

I don’t expect Abbott to take this unsolicited advice, but he could look at the cautionary lesson provided by Bligh, Gillard and NSW Labor among others, and consider carefully whether it’s better to take a few lumps now, or gain office on the basis of commitments that will prove a millstone, whether they are abandoned or adhered to.

[Comments are closed]

* I know, this quote attributed to Thomas J Watson is apocryphal, as is a similar one attributed to Bill Gates, but lots of similar statements have been made in reality, and they’ve all proved to be silly. For example, I can remember people saying in the early 80s that 8-bit address space of 64k (a double octet) were all we would ever need. Many more people said, well into the 1990s, that graphical interfaces were an unnecessary luxury and that personal computers would always start with a C:\> prompt.

Responding to my observation that Andrew Bolt’s estimate of the impact of the carbon tax/price on global warming was out by a couple of orders of magnitude (he calculated the impact for one year, not that over the decades for which the policy is supposed to operate), Quadrant contributor John Dawson jumped into the fray and pronounced himself satisfied with Bolt’s arithmetic (H/T Terje Petersen). Dawson’s piece is too confused for a link but confusing enough that Terje couldn’t see where he ran into error. Rather than try to clean up this arithmetic mess, I’ll step back to something much simpler – the inability of Dawson, and his mentor Keith Windschuttle, to count to three.

Long-term readers will recall that, back in 2002, Windschuttle made quite a splash with The Fabrication of Aboriginal History, Volume One, Van Diemen’s Land, 1803-1847, which attempted a revisionist account of the tragic history of the Tasmanian Aborigines. He didn’t achieve much except to point out some sloppy footnoting in a fairly obscure recent history[1]. The main interest in the book was as an appetiser for the succeeding volumes, on Queensland and Western Australia, promised to appear on an annual schedule. Here, Windschuttle promised to refute the work of Henry Reynolds and others, who painted the frontier as a scene of prolonged violent warfare between the indigenous inhabitants and the white settlers who sought, successfully in the end, to displace and subdue them.

Year followed year, and promise followed promise, but Volumes 2 and 3 didn’t appear. Finally, in 2009, Volume 3 was published. Not only was there no Volume 2, but the new Volume 3 bore no resemblance to the book originally promised for 2004. Instead, it was a critique of the Stolen Generations report and the film Rabbit Proof Fence. Windschuttle said that this volume had been published “out of order”, and that the missing volumes 2 and 4 would appear “later”.

Even by Windschuttle’s standards, this is bizarre. The Stolen Generations debate refers almost entirely to the 20th century, so this volume, on his reasoning ought to come after the others.

It’s truly bizarre to see self-satisfied climate “sceptics” who can’t even calculate a standard error, but have convinced themselves they are smarter than professional scientists. Stranger still to see someone like Bolt, who’s incapable of basic arithmetic, treated as an expert by his readers. But surely even the editor of a literary magazine ought to be able to count to three.

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Discussion over the Labor leadership, and the government in general, is now academic, in the pejorative sense of the term. Barring a shock on a larger scale than that of 2001, Abbott is going to win the election, whenever it is held, and win it easily. Nothing Labor does or doesn’t do can make any real difference now.

At this point, the only issue to be considered is whether he can be stopped from gaining control of the Senate. Labor and the Greens have 21 seats from 2010, and Labor can be assured of 1 each in the territories (there’s a perennial hope that a Green or independent will win the second ACT seat, but I’m not counting on it. That means they need to win a combined 3 seats in every state for a majority, and can block legislation if they win 3 in at least five states.

Appalling as Labor’s situation is, they should still muster enough support for two senators in each state, but have (AFAICT) no realistic chance of getting three anywhere. So, what’s needed is to elect a Green in every state.

What can be done to achieve this? The first requirement is that the geniuses who run Labor’s preference strategies should not pull the stunts they have in the past, cutting deals with rightwing independents in the futile hope of adding one to their numbers. If anyone reading this has any influence in this respect, they should exercise it now.

The second is to make a positive case for the Greens that will appeal to people who don’t like Abbott, but can no longer justify a vote for Labor. In my view, the Greens are now the real inheritors of the best traditions of Labor, as opposed to the kind of hardhat/HiVizVest posturing that passes for “Labor values” in the ALP. But that case needs to be spelt out for voters who are understandably turned off by the entire political scene.

Suggestions welcome

If you engage in commentary for an extended time on any issue, but particularly on politics, you’re bound to get things wrong. In such cases, there are a few options. The most common is to double down, grasping at any straw that will justify your original claim. Another is to wait; the world is so changeable that a prediction that seemed laughably wrong at one time may turn out correct after all. But, mostly the best thing is to learn from your mistakes.

I’ve made a few mistakes, but the one that I’ve been picked up on most is my prediction, in 2007, that

The Liberal Party will never again win a federal election.”

Of course, this wasn’t meant to be taken at face value. I went on immediately to say that

This isn’t a prediction of unending Labor rule, rather an observation that the Liberal and National parties are in such dire straits that they can’t continue as they are. They haven’t got enough support, parliamentary representation or ideas for one party, let alone two.

I thought the obvious solution was a merger, as in fact happened in Queensland not long afterwards. But my many friends in the Murdoch Press and the rightwing blogosphere have taken great delight in quoting the first sentence out of context. Given that the Liberals have yet to win their election, I followed the waiting strategy, waiting to see whether the turn of events (and the fact that my characterization of the Libs and Nats remains entirely accurate) might validate the prediction after all. But, after the events of the last week, I think it’s time to admit error.

What lessons should I learn from this?

First, never try to be cute on the Internetz, unless you’re a cat. I could have written a straight post suggesting a merger and it would long since have been forgotten. I knew perfectly well that Newscorp and its allies are shameless liars, and that their readers are utterly gullible (provided that what they are reading confirms their prejudices) and I handed them a stick to beat me with. I’ll avoid paradox in future.

Second, never underestimate the capacity of the Labor Party for suicidal stupidity. At the time I wrote the post, Labor seemed safe for two or more terms everywhere but NSW. Instead we saw
* WA Premier Carpenter revoke the ban on dealings with Brian Burke, leading to immediate disaster
* Privatisation campaigns in both NSW and Queensland
* The dumping of Nathan Rees (NSW Labor’s last hope) in favor of Tripodi-Obeid puppet Kristina Keneally
and, most disastrously of all,
* The coup against Kevin Rudd. The march of folly has continued to the very end, with a majority of the Parliamentary Party confirming, for the second time, that they would rather give Tony Abbott control of both houses of Parliament, and, in many cases, lose their own seats, than break with the failed leadership of Julia Gillard. The many (now former) Labor MPs in Queensland who marched straight over the electoral cliff with Anna Bligh and Andrew Fraser seem to have set the pattern here

Paul Norton has a post at LP, summed up by the teaser

current poll support for the election of an Abbott-led Coalition government is soft and brittle. Yet it exists, and persists. And voter opinion of what the Federal Labor government has actually done is not all that unfavourable. Yet people don’t think the government deserves to be reelected. What are we to make of this?

I don’t think it takes a genius to work out that a sufficient explanation for this paradox is the personal unpopularity (among a large group of voters, detestation) of Julia Gillard. Other factors may be relevant, but most of them are exacerbated by the leadership problem. In particular, the Obeid scandal is made worse for Federal Labor by the perception that Gillard is beholden to the same machine operators (Arbib, Bitar, Conroy and ultimately Graeme Richardson) who put Obeid in a position to corrupt the entire NSW Party.

For the sake of argument, let’s grant that this is all the result of misperceptions and bad press and that Gillard is both likeable at a personal level and someone with a “steely determination” to get the job done for Labor. It’s obvious, by now (and regardless of marginal fluctuations in polls) that this perception is not going away within six months. In these circumstances, wouldn’t a leader who cared about her colleagues, or one who was determined to do the best thing for the country, decide that this was the time to talk a walk into the snow, and give the rest of the party a shot at survival?

Anyone who has been around the left of Australian (or UK) politics long enough will be aware of the Fabian Society. It’s a group that’s earnest in the way only an organization founded in the late 19th century can be. It produces carefully researched papers on topics like education funding and housing policy, invariably worthwhile, but rarely fiery.

The Society takes its name from a Roman general who achieved victory over the seemingly invincible Hannibal, by avoiding pitched battle and wearing his opponent down: the idea was that socialism should be achieved by gradual reform through democratic processes, rather than through the revolutionary approach advocated by Marxism. This gradual approach was symbolised by the adoption, as a logo, of a tortoise (or maybe turtle), drawn by Walter Crane, the leading illustrator of children’s books in the late 19th century, and a society member. And, after 100+ years, even the most optimistic Fabians would concede that, if anything, the tortoise exaggerates the pace of movement towards socialism.

In spite of, or perhaps because of, this resolutely gradualist approach, the Fabian Society has always loomed large in the demonology of the nuttier sections of the political right, appearing as some sort of cross between the Illuminati and the United Nations. Here for example is Rose Martin of the Mises Society, warning that the tortoise is now going at the pace of a freeway.

The Institute of Public Affairs is the leading Australian representative of this kind of wingnuttery[1] (although it manages to get taken seriously by surprisingly many) so it’s unsurprising to see the IPA’s Julie Novak muttering darkly at Catallaxy[2] about this “shadowy group” (she’s a bit puzzled that Julia Gillard openly declares her membership). What’s interesting is her claim, with illustration that “The logo of the Society, of a wolf dressed up in sheep’s clothing, is all you need to know about how these people seek to achieve their objectives”

Huh? What happened to the tortoise? The answer it turns out, goes back to a joke played by George Bernard Shaw early in the 20th century

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A prominent figure in Australian politics in the first half of last century, Billy Hughes, ‘the Little Digger’, was famous for his flexibility, having successively led the Labor Party, National Labor, the Nationalists and then the United Australia Party, before serving in Labor’s Advisory War Council and then joining the Liberal Party. According to legend, he was once asked why he had never joined the Country Party (now the National Party) and replied ‘You have to draw the line somewhere’.

Starting about the time Hughes retired, the Institute of Public Affairs has been similarly flexible, serving first as a Liberal Party slush fund, and then combining a high-minded line in free-market ideology with hackish advocacy on the part of all kinds of vested interests. But, unlike Hughes, the IPA has decided not to draw a line anywhere.

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We’ve had quite a few debates here about the Labor leadership. While there are plenty of issues, there is one that, at this point in the cycle, trumps all the others. Of the two serious contenders, who is more likely to save Australia from the disaster of an Abbott-led coalition government? The answer to this question is so clear-cut that I find it impossible to believe anyone would dispute it: Julia Gillard has almost no chance of victory at this point, while Kevin Rudd has a chance. There’s certainly room for debate about how good Rudd’s chances are, but none, I think, as regards Gillard’s. And, whatever the stylistic differences, in substantive terms Gillard’s agenda is the one she inherited from Rudd.

The question now is whether we will have another three years to implement that agenda, or whether we have a Newman-style slash and burn assault on the public sector, the environment, science, women’s rights and, of course, the working class. The only thing likely to stop that is an immediate change of leadership.

As last year drew to a close, it seemed quite possible that the Gillard government could be re-elected. The polls were going the right way, the reality of the carbon price had discredited the apocalyptic scare campaign of the Opposition, and the various real or alleged scandals surrounding the government seemed to be fading. The carbon issue is still going the right way, but everyhing else has turned around severely since then: even before the disasters of the last week, the polls had turned bad, pointing to an uphill struggle.

Last week was bad for the government in all sorts of ways, but the Obeid hearings before ICAC were in a league of their own. I was aware of the scandal, of course, but the evidence of Obeid’s total control over the NSW Right, and therefore of the state government, still surprised me. Even more out of the blue was the involvement of two federal ministers, Conroy and Burke. While taking free accommodation from Eddie Obeid looks a lot worse in retrospect than it would have at the time, his dubious reputation goes back a long way.

It’s hard to see how Gillard can credibly promise to clean up this mess. Her long reliance on Thomson and Slipper, the role of the NSW Right in sustaining her power, and, fairly or otherwise, the old allegations about her own career, all count against her. At this point, as Bernard Keane says (h/t Nancy Wallace)

‘If only Labor had an alternative leader who was fixed in the public mind as someone profoundly at odds with Labor powerbrokers …’

Obviously, he’s talking about Kevin Rudd. While it’s late for a shift, the case has become stronger in many ways. Of the people strongly identified with the personal attacks on Rudd last year, Roxon has gone to the backbench, Conroy and Burke are now liabilities, and Swan’s failed surplus push has greatly weakened him.

A simple change of leader would not be enough. Labor needs to excise the tumour that is the NSW Right. If restored to the leadership, Rudd should immediately push for a full-scale intervention into the NSW Branch removing all the existing officials, and putting someone credible like John Faulkner in charge. The whole faction system needs to be reformed or abolished, starting with the dissolution of the NSW RIght. And those compromised by their association with Obeid, Richardson and similar agents of corruption need to be expelled or permanently removed from any positions of power.

I don’t know if it’s too late to stop the election of an Abbott government. But it’s evident that Gillard is not the right person for the job.

The floodwaters have receded[1] and the miserable task of cleaning up is beginning in Bundaberg, Laidley and other communities. Here in Brisbane we were lucky enough to avoid another flood. The remnants of Cyclone Oswald hit us in the form of a summer storm, bigger than usual, but a pretty regular event here. It wasn’t surprising that hundreds of thousands of people (including me) lost electrical power, or that repairs couldn’t start until the wind had subsided. Even so, the restoration of power was very slow – in many places slower than in 2011. It’s become evident that, like all areas of the Queensland public sector, the electricity distributors (Energex in the Brisbane region and Ergon elsewhere) have been subject to staff cuts that have hampered their ability to respond. The union was issuing warnings about this last year, and they have been proved right. In one startling case, workers were delayed from responding to the emergency in Bundaberg, so they could be briefed on their redundancy options.

Ergon and Energex are government-owned corporations, which are normally supposed to make their own commercial decisions. In this case, however, the shareholding ministers, Energy Minister Mark McArdle and Treasurer Tim Nicholls, have actively intervened to push for job cuts. The obvious explanation is that they are trying to boost profitability (at least in the short term) to prepare the enterprises for privatisation. The regulatory system is supposed to require Energex and Ergon to meet reliability standards, but it seems likely that it is vulnerable to gaming, possibly by excluding extreme (but not uncommon or unpredictable) events like this storm from the criteria (I plan to look into this).

The cuts in the electricity sector have been matched or exceeded across the entire public sector, including the services on which we all rely in an emergency. Meanwhile, Campbell and Nicholls are building themselves a brand new office tower, demolishing the aging but serviceable building in which they currently work. They are paying off their supporters with cuts in payroll tax, grants to racing clubs and so on. But if you want a symbol of this government, you can’t go past Jeff Seeney, who tried to get a government plane, currently used for organ transplants and similar emergencies, allocated for his personal use.

Last time I paid attention to Opposition climate spokesman Greg Hunt, he was talking to the Oz, making absurdly inflated claims about the impact of a carbon price[1] on household electricity bills. Now he’s at it again, with a statement to Imre Salusinszky at the Oz, claiming that I endorsed Jonathan Moylan’s (reported) actions in the Whitehaven hoax, and that I supported market manipulation more generally. From that, he draws the conclusion that I have breached my legal obligation under the Public Service Act to comply with the law in all matters relating to employment, and therefore that I an not a fit and proper person to be a member of the Climate Change Authority. Here are the money paras from Salusinszky’s email to me and Hunt’s statement to the Oz

Greg Hunt says your public support for Jonathan Moylan raises a potential conflict with your role on the Climate Change Commission (sic), because the public service code of conduct deems that “an APS employee, when acting in the course of APS employment, must comply with all applicable Australian laws.” Hunt’s point is that by supporting Moylan you are implicitly endorsing stock market manipulation.

Under the Public Service Act it is clearly inappropriate and irresponsible for Statutory office holders to be supporting market manipulation and the use of false and misleading information. This raises deep questions in terms of both the Act and the public service Code and values on a number of fronts. The simple answer is that no public official should ever be endorsing the use of false and misleading information to manipulate the share market

Obviously, this is a grotesque misrepresentation. My view of Moylan’s (reported) actions was summed up by the observation “I’m not a big fan of hoaxes”[2]. My posts on the subject were not concerned with the ethics of the hoax, but with the absurdity of the reactions to it.

But the claims that I acted unlawfully under the Public Service Act take Hunt’s silliness out of the normal political category, and well into the realm of defamation. Of course, Hunt is safe enough so far. I haven’t got the time, energy or financial resources to pursue him, other than through this blog. News Limited is a different matter. Given their deep pockets and demonstrable history of malice towards me, they’ll make a tempting target if they are silly enough to publish Hunt’s libels. I don’t usually read the Oz, but I will certainly do so with care tomorrow.

Update When he was advised of my response by Imre Salusinszky, Hunt backed off, though with bad grace (he stated to me in email that it was more than he thought I deserved) and in a way that makes his claim of a breach of the Public Service Act even more nonsensical (leaving aside the fact that, at least according to Bernard Keane, I’m not covered by the Act anyway). The resulting article, in which Hunt also attacks Clive Hamilton, is here.

While checking on that report, I found another Hunt piece, a passionate defence of free speech against the “un-Australian” threat of litigation. Published in the Oz, of course, and only five days ago.

Finally, I should say that I don’t have any complaints about Salusinszky’s actions in this matter. He advised me of the accusations and took my response back to Hunt. The report as published is an accurate representation of what I wrote.

fn1. A policy he supported for decades, until it became necessary to oppose it.
fn2. I never mentioned Moylan by name, and I have no knowledge as to whether he acted as reported and, if so, whether this constituted manipulation of the share market. As I said on Twitter, that’s his problem, not mine.

Continuing on silly claims about the Whitehaven hoax, the figure of $300 million is being bandied about as the cost to Australia’s Mums and Dads. I haven’t checked, but I assume that this is the change in market capitalization of Whitehaven from the opening to the point at which the hoax was exposed. That is, it’s the amount that would have been lost if all the shares in the company had been sold at the bottom, assuming this was feasible, which it isn’t. Of course, an equal amount would have been gained by the buyers.

But, ever vigilant on behalf of Australia’s Mums and Dads (I’d like extra bonus sympathy as a Grandad!), I thought I would check to see if any such outrages are continuing. It turns out that the All Ordinaries index has fallen 16 points, or about 0.4 per cent, since 10am. Assuming a market capitalization of 1.2 trillion, that’s nearly $5 billion ripped from our parental pockets in the course of a single morning. Almost certainly, some of this due to spurious rumors, some of which may have been deliberately spread.

Can’t something be done about this? Won’t somebody think of the children?

PS: I see in comments that Alison Parkes has made a similar point

I don’t have a strong view on the hoax announcement that ANZ had withdrawn its support for the Whitehaven coal project. However, I do have some thoughts on the widespread claim that “Mums and Dads” lost significant sums of money as a result of the short-lived fall in share prices that ensued.

First, the claim is undoubtedly true. By the time they have enough money to invest in, or speculate on, the share market, the great majority of Australians have children. Nathan Tinkler, for example, is a father of four. Gina Rinehart is, at least according to her kids, a spectacularly bad mother, but she’s a mother all the same. The unremarkable fact that most owners of shares have children does not entitle them to any particular sympathy.

More importantly, this was a zero sum event. For every Mum, Dad, or childless person who lost money by selling at the bottom, another gained by buying.

Finally, what kinds of Mums and Dads lost money on this event? Anyone who left their investment portfolio unchanged over the course of the day was unaffected. So, the losers fall into two groups
(a) Unsuccessful speculators, who might be better advised to spend more time with their kids and less time playing the market
(b) A few unlucky parents who shifted their long-term investments the right way (that is, out of coal) but at precisely the wrong time

As regards Mums and Dads in group (b), I offer the consolation that, while they didn’t get the timing precisely right, a decision to sell coal stocks will very probably turn out well in the long run. And, as far as investing is concerned, getting out of coal is certainly the best thing they could do for their children.

Jenny Macklin is still dealing with the response to her terse answer “I could” to the question of whether she could live on unemployment benefit. But the policy shift that led her in front of the cameras is the product of a complicated history that might be worth explanation. I’m going to go from memory, and invite commenters to supply links or corrections for my recollecitons.

The story starts in the 1960s, at a time when unemployment was very low, and spells of unemployment very short. Whether in fact or reality, the archetypal single parent was a widow. The vast majority of income support took the form of age pensions, which were means-tested and set at a very low level. Around this time Ronald Henderson estimated a poverty line at 25 per cent of average weekly earnings (AWE), well above the basic pension.

Over the late 1960s and early 1970s, pensions were increased to approximately the Henderson poverty line. In combination with some additional concessions and the introduction of Medicare, these changes virtually eliminated poverty among the old.

The changes to the value of the old age pension, relative to weekly earnings have been sustained.[1] Initially, unemployment benefits and supporting parents benefits (which replaced the former widows pension, IIRC) rose in line with the old age pension. Both were indexed to the CPI, but ad hoc adjustments kept them broadly in line with AWE. But the Howard government replaced CPI adjustment with AWE adjustment for pensions, while retaining indexation to the CPI for unemployment benefits. The result has been that the value of UB (now Newstart or some similarly Orwellian name) has fallen relative to both pensions and incomes generally.

Around 2006, the Howard government turned its attention to supporting parents, introducing a rule that recipients would go on to UB when their youngest child turned 8. At the time, the measure was strongly attacked by Labor. Here’s Penny Wong. Existing recipients were exempted (the term “grandfathered” does not seem apposite here), with the implicit promise that they would remain under the old rules. In the search for a surplus, the Gillard government decided to abandon that promise and push existing recipients with children over 8 onto UB. The question that got Macklin into trouble was about that decision.

There is a defensible case for setting the old age pension higher than UB, particularly if the government pursues active labour market policies to help the long-term unemployed find jobs. The pension needs to be enough to live on for decades, over which time household goods have to be replaced, and other long-term expenses addressed. Most spells of unemployment last only a few months, so various kinds of expenditure can be deferred. But the gap that has emerged over the past 15 years is much larger than can be justified in this way, particularly in the case of supporting parents, who are more likely to spend long periods out of employment. Instead of completing the Howard agenda, the Gillard government ought to be looking at increasing the real value of benefits, allowing the unemployed to share in some of the growth in incomes for the community as a whole.

fn1. In other respect, showever, the generosity of the pension system peaked around 1980. Means tests, which were eliminated in the 1970s, were reintroduced in the 1980s, and the pension age has gradually increased.

She says “I could”, but you watch the video, Jenny Macklin’s answer here is very odd. She ducks the question once, has it put again, and is asked “Could you live on the dole”. She says “I could”, without any elaboration then goes straight back to spin. Her office then tries to delete it from the transcript.

It’s such a spectacular screwup, I think she must have imagined she was saying something different. But, whether or not that’s right, she, and the government, deserve all the pain they get for this piece of nastiness.

At about the same time as announcing that Queensland was an economic basket case, requiring large scale sackings of public employees to balance the books, the Newman government called for tenders for a project that, among other things, involves demolishing the 1970s office tower in which the Premier, Deputy Premier and Treasurer work, and replacing it with a spiffy new one. Some might see a contradiction here, but according to Treasurer Tim Nicholls, the new building “won’t cost taxpayers a cent“.

I’m tempted to say “if you believe that, I have a bridge for sale”, but of course Australian governments of both parties have become adept in bogus sales of bridges, roads and assets of all kinds. So, I’ll quote the famous aphorism, There Ain’t No Such Thing As A Free Lunch.

In the case of the “free lunch” apparently offered by US bars in the past, it’s clear enough that you are unlikely to get the lunch more than once if you don’t order a beer or two, and that the price of the lunch is included in that of the beer. In a complex transaction like the current one, it’s not immediately obvious how we are paying for Mr Nicholls’ new office. Some of it is in the 15-year lease payable to the owners of the new building, some of it in land being given away with the deal and some of it, probably, in valuable rights being handed over free of charge. What we do know is that, when you can’t see the price of what you are buying it’s almost certainly higher than if you paid upfront.

Of course, we have a Commission of Audit, headed by former Treasurer Peter Costello, that is supposed to expose dodgy transactions in the State’s books. The Committee prepared its draft report over the same period as this deal was going down. The government hasn’t released the report. An amusing, but unlikely, possibility is that the Commission actually did its job and criticised this boondoggle, leading the government to bury the report. More likely, Costello has done his job by helping to create the panic needed to justify 20 000 sackings, and is now just an embarrassment.

The big political news yesterday was a national opinion poll showing, on its face anyway, that Labor would easily win an election held right now. you didn’t see it? I wouldn’t have either, except that it was in my Twitter feed for about five minutes and I happened to be looking at it. AFAICT, none of the major national news organizations even mentioned it. There seem to be a couple of possible reasons for this. One is that some people don’t like Morgan as a pollster (I don’t follow the polls closely enough to have a view on this).

The second is the idea that a result so far out of line with other polls (52.5-47.5 for Labor) must be a “rogue” or “outlier”. This reasoning reflects the fact that political journos still don’t understand stats. It would be sensible to ignore a poll finding if it was the result of a breakdown in sampling procedures, or a biased question. But this is the same poll Morgan has been running for many years, presumably with the same procedures. What is more likely is that, by chance, this particular sample population was more pro-Labor than the population as a whole. Every sampling procedure is subject to this kind of error. But the correct response is not to discard the data, but to collect more, or combine it with existing evidence.

Given four or five of recent polls with results around 53-47 for the coalition, simple averaging suggests that the best estimate would now be around 52-48. A better procedure would be to use a Bayesian model. This guy has done it, and Hey Presto, concludes that the best estimate is 51.9-48.1.

Coming back to the statistical illiteracy of journos, the problem may be put as follows. On the one hand, they know that it would be silly to run a “Labor ahead” story. On the other hand, they don’t have the technical chops to explain Bayesian updating, or even weighted averaging, and to do so would make it impossible to write future stories suggesting that small variations in poll numbers have any meaning.

Even so, I think Tony Abbott has had a lucky break here (as has, in a secondary way, Julia Gillard). The only thing keeping him in his job is the perception that, while he may be unpopular, the LNP are sure to win. Even a single poll challenging that could pave the way for a spill. And if the result were to return Malcolm Turnbull, the outlook for the Gillard government would suddenly get a lot worse.

The horrific shootings in the US may or may not produce some restrictions on the gun culture there, but they provide a renewed warning of the dangers here. Australia has experienced a substantial reduction in gun deaths since John Howard bravely introduced severe restrictions in the wake of the Port Arthur massacre. But the gun nuts, aided and abetted by people like Campbell Newman, have been chipping away at those restrictions ever since.

It’s time to take a clear stand on this. There’s no reason why anyone should be allowed to own a handgun. Their sole purpose is to kill people. Those who need handguns for their work (like police officers[1] and armored car guards) should have them checked out at the beginning of each shift, checked back in at the end, and kept securely locked away when not in use. Farmers and professional shooters need rifles and shotguns, but anyone else who wants to use deadly weapons like these should seek psychiatric treatment. Anyone outside these categories found with a weapon designed to kill people should be assumed to have that end in mind and locked away from the rest of us until they can show that it is safe to let them out. And, obviously, military weapons should be confined to the military.

Undoubtedly, criminals will ignore the law – that’s why they’re criminals. But in a situation where only outlaws (and police) have guns, the possession of a gun will permit an easy conviction in cases where crims might otherwise get off.

fn1. As UK experience shows, there’s no reason for the majority of police to carry guns. That should be limited to trained specialists.

The latest news showing that former NSW Treasurer Michael Costa is up to his neck in the Obeid scandal comes as no surprise. Australian politics has produced few characters more unattractive than Costa, and it is unsurprising that he should have enriched himself mightily on the proceeds (to the tune of $3.5 million according to the SMH, he says “only” $500 000).

At this point, it’s evident that this isn’t a problem of individual malfeasance but one of structural corruption. The core of the corruption is the NSW Right faction aka “Sussex Street”. [1]. While corruption has been an ever-present problem on both sides of NSW politics[2], the wholesale corruption of the NSW right can be traced back to the election of Graham Richardson as General Secretary in the 1970s. From the bashing of Peter Baldwin to the rise of Obeid, Richardson oversaw the conversion of the rightwing machine into a wholly corrupt organization. At this point, there is no-one in the faction who doesn’t owe their position, directly or otherwise, to Richardson or the crooks he promoted and protected.

If Labor is to have any chance of avoiding catastrophe in NSW at the next federal election, the National Executive needs to intervened now to shut down the NSW Right once and for all. The faction should be proscribed so that no ALP member is allowed to belong to it. The current officers of the NSW Branch should be sacked, and direct national control maintained until the party can be cleaned up. In this respect, Faulkner’s “one strike” policy should be applied with immediate effect, and including past offences.

It may well be that the only way to get rid of the NSW Right is to ban factions altogether. While the factional system has both advantages and disadvantages, none of the advantages are remotely comparable to the cancerous damage wrought by Sussex Street.

fn1. Ludicrously, they now propose to fix their problems by changing address, perhaps to somewhere in the much-touted Western Suburbs

fn2. Back in the 60s and 70s, Premier Robin Askin and Lord Mayor Leo Port were notoriously corrupt and Howard’s right-hand man Arthur Sinodinos is caught up in the same mess as Costa.

Following the tragic suicide of a British nurse, the victim of a cruel and unfunny practical joke by an Australian radio station 2DAYFM, what action can we expect from the Australian Communications and Media Authority which is supposed to regulate such matters? Following the most recent of many such breaches of license conditions, in May last year, ACMA warned 2DAY-FM that it could lose its license if such behavior continued. But ACMA has never cancelled a license, and clearly never will. So, we can expect another warning, or perhaps some meaningless, and unenforceable, license conditions.

ACMAs total failure contrasts with the success of the Facebook backlash against Alan Jones, which has cost him and his employers millions in lost advertising revenue, and greatly reduced his power and influence.

At this point, it’s clear that licensing has failed. Rather than continuing with this farce, we should auction the spectrum currently allocated to commercial radio, and let the winners do what they want with it, subject to the ordinary law of the land (which prohibits recording deceptive calls, though this law is never enforced against radio stations). As a community, we should continue to punish the corporations that sponsor the likes of Jones, Kyle Sandilands, and their latest imitators.

The Queensland LNP comes up with this. Fortunately, I doubt that this silliness will have any effect, except to increase the likelihood of a one-term Newman government, already close to even money in my view.

Having lived in Queensland for most of the last 20 years, the only LNP government I can remember is that of Rob Borbidge, who seemed like a paragon of good sense compared to this lot. It really is as if the entire LNP has been in cold storage since the Joh era and revived for the occasion. But, given Labor’s appalling betrayals of its own voters, they were certain to win, and better that they should be so obviously silly as to make the next election a chance for real change.

Following up on my post about Rachel Nolan’s arguments for privatisation, I ran across this interview with former ALP education minister and attorney general Cameron Dick, generally regarded as a rising star while Labor was in office. Before Nolan, Dick was the only minister willing to go on record with thoughts about Labor’s defeat and he had this to say

he felt the party should have concentrated more on the economy during the election campaign, emphasising the decisions it had made.

‘‘I do think Labor fell into the error, or seriously miscalculated and under-estimated the desire for Queenslanders to hold onto the AAA credit rating,’’ he said.

‘‘And I think the concern Queenslanders had generally about government debt and deficit.

‘‘And I think we were unable to effectively tell our story about investing in infrastructure to keep jobs.

‘‘I mean, that was the strategy we took as part of the global financial crisis.’’

Say what? All of these points would be a great explanation if Labor had lost the 2009 election, after sacrificing the AAA rating to maintain infrastructure and jobs as a strategy in response to the global financial crisis. But, in reality Labor won that election easily. The plunge in the polls came when they announced a drive to restore the AAA rating by selling public assets, mostly infrastructure, and by pushing the panic button with respect to government debt and deficits. All the polls showed that no one except the pollies (and powerful bureaucrats like Doug McTaggart and Leo Hielscher) gave two hoots about the discredited ratings agencies. They hated the asset sales, and dumped the government as a result.

To strengthen my conclusion from last post, while the Newman government has been a disaster, the Labor MPs who supported the sales to the bitter end (all but a handful) brought their fate on themselves, and deserved it. Labor will certainly win lots of seats next time around, and perhaps even win government. I hope they can do a better job selecting candidates whose views reflect those of Labor voters.

During the long debate over the Bligh government’s sale of public assets, I was frustrated by the government’s refusal to mount a serious case in favour of the sales. The official argument, that the money gained from the sale of income-earning assets could be used to finance the building of schools and hospitals was such obvious nonsense that even strong advocates of privatisation like Henry Ergas were willing to sign a letter I organized pointing this out and calling for a proper debate. Now finally, former Transport Minister Rachel Nolan has given us some idea of what the government was really thinking.

Nolan has a piece in Quarterly Essay (paywalled, but there is a summary from Laura Tingle here), in which she laments that Australians “have little philosophical grasp of the (rightful) diminution of governmental power which deregulation has brought” . She retails some anecdotes of being besieged by “rent-seekers” wanting her to direct Queensland Rail in various ways[1], and complains about constituents wanting her to fix various things outside her control.
Read more…

I don’t have much more to say about the systemic corruption of the NSW Labor party than I already said in this post from July, except that I now think Federal intervention is essential. Suspending Eddie Obeid is not nearly enough. Those who allied themselves with him including Tripodi, Roozendaal, Bitar, Arbib and Keneally must all go too. And Labor needs a new Parliamentary leader – John Robertson is too compromised to present a clean face. It will be a long while before Labor is electable at a state level in NSW. But a determined cleanup would help reduce the damage to the national party

Back around 1970, the Labor Party was unelectable because its biggest branches, in NSW and Victoria, were controlled by factional machines of the right and left respectively, who were still refighting the battles of the 1950s Split. The eventual response was Federal intervention to restructure both branches. The intervention was more successful in Victoria than in NSW, but overall the results were good enough to produce a revitalised Labor party. The election of the Whitlam government was one result, as was the strength of the early Hawke ministries, almost any member of which would outperform the great majority of both frontbenches today.

I doubt that an intervention would produce a similar result in NSW today, but the situation is now so dire that it could scarcely make matters worse. It’s hard to imagine a political party with less justification for its continued existence than NSW Labor. It sold out its stated principles with repeated attempts to privatise the electricity industry, then made a botch of the job anyway. It has made itself look stupid with repeated changes of leaders (the only one who tried any resistance to the machine was Nathan Rees, and he was promptly squashed). Its members are enmeshed in every kind of corruption, financial, ethical and sexual, above and beyond the routine corruption of political processes that turned the word “rort” from Sussex Street slang into an Australian byword for sharp practice. Electorally, it’s a disaster area, having gone down to the worst defeat in its modern history, under the sock-puppet leadership of Kristina Keneally. Even though the NSW Libs are, as they always have been, appallingly bad, the O’Farrell government is riding high.

And now, these geniuses have decided that it’s smart politics to make war on the party that’s keeping Federal Labor in office, and with which they will need to deal for the indefinite future if they ever want to pass legislation through the Parliament. Looking at this appalling crew, I can only quote Oliver Cromwell “You have been sat too long here for any good you have been doing. Depart, I say, and let us have done with you. In the name of God, go.”

Update My friends at the Oz take a keen interest in all my thoughts, so I wasn’t too surprised to see this post linked in their “Cut and Paste” section. However, the headline All the Climate Change Authority member would like now is to get rid of the NSW Right seemed both unwieldy and obtuse, in a fish-meets-bicycle kind of way. Why should my (widely shared and longstanding) views on the NSW Labor Right machine be of any more interest by virtue of my membership of the Climate Change Authority? And why should my enthusiasm about the election of the Rudd government (also linked by Cut and Paste) be relevant to either?

The answer, I would imagine, is this post by Sinclair Davidson at Catallaxy who (in a quite strange misreading) took the imprecation “In the name of God, go” to be directed, not at the Sussex Street machine repeatedly criticised in the post, but at the Federal Labor government. Terje Peterson tried to set him straight in comments (thanks, Terje), but I had to spell the point out before he added a correction on Sunday evening, which made the entire post rather pointless. By that time, I imagine, the cutter and paster had already set the story up and gone home, leaving the unfortunate sub-editor to do a salvage job with the headline (not the first time!).

One of the jobs I had marked on my calendar for the holiday season was dismantling the second interim report of the Costello Audit Commission, due to be delivered on 30 November. While it’s obviously necessary to respond to these exercises in deception, I can think of plenty of better ways to spend the summer break. Fortunately, Campbell Newman turned out to be even less keen on defending the report than I was on attacking it. The government has announced the report won’t be released after all, so we won’t see anything more from Costello until February. Thanks, Can-Do!

Discuss.

Dumping yet another election promise, Campbell Newman has just announced the end of restrictions on uranium mining in Queensland. Crikey asked for my opinion (their article is here, maybe paywalled). I said

The end of Queensland’s ban on uranium mining comes at a time when long-term prospects for uranium markets have never looked bleaker. The failure of the “nuclear renaissance” in the US means that at most 2-4 new plants will be built there this decade, while older plants will close as plans for upgrades and license extensions are put on hold. In Europe and Japan, not only will there be little or no new construction, but the phaseout of existing plants is being accelerated. China’s big expansion plans are still on hold after Fukushima, and the program as a whole is being scaled back in favor of renewables. In these circumstances, uranium exporters must accept lower prices, be less choosy about their customers, or both. As one of the few markets with significant growth potential, India is in a strong bargaining position. It’s not surprising that the Gillard government has been keen to overlook India’s contribution to nuclear proliferation and the limited progress that has been made in separating civilian and military programs and stockplies.

Republicans are now so habituated to conspiracy theories that they have become the default mode of reasoning. Even minor news items, unfavorable to the Repub line of the day, instantly produce conspiracy-theoretic explanations. Moreover, existing, previously non-partisan conspiracy theories are being welcomed in to the Republican coalition. Three examples from the past week , two of them for the same news item

* Unexpectedly good employment figures produced the “jobs truther” conspiracy theory that the Bureau of Labor Statistics had cooked the numbers. This was first advanced by former General Electric CEO Jack Welch, taken up enthusiastically by Republican rightists like Laura Ingraham and Allen West, and boosted by Fox News.

* As the difficulties with this theory became apparent, Repubs switched to a non-falsifiable alternative. Unemployed Democrats had conspired to lie to BLS surveyors by claiming they had found jobs, thereby boosting Obama’s re-election numbers.

* The third is a health conspiracy which is based on the idea that the symptoms normally associated with depression or chronic fatigue syndrome are actually a chronic form of Lyme Disease (an infection carried by deer ticks) and that the medical establishment is conspiring to suppress the evidence. Romney and Ryan are pandering to this.

The biggest (non-political) conspiracy theories remaining unclaimed are Ufology and anti-vaxerism. So far, at least these seem to be beyond the pale for the Repubs. Michelle Bachmann got a very negative reaction to her embrace of anti-vaxerism during the primary campaign, even though she was using it to bolster the rightwing case against HPV vaccination for girls. If we ever see a softening on this, we’ll know that the party has finally lost all remaining touch with reality.

Not quite on conspiracy theories, but here’s a Repub member of the House Science committee saying ““All that stuff I was taught about evolution and embryology and the Big Bang Theory, all that is lies straight from the pit of Hell,”.

How about Australia? So far at least, “cafeteria crazy” seems to be the rule in most places. Full-blown conspiracy theories on climate change coexist with routine political rhetoric on most other issues.

But the local right has long been dependent on talking points imported from the US, and the supply chain is increasingly dominated by conspiracists. Examples of full-blown crazy are the overlapping circles of Catallaxy and Quadrant who recirculate most the US conspiracy theories. Here’s Quadrant denouncing Darwinism. And more here from rightwing eminence grise, Ray Evans, linking evolution and climate science. And here’s Catallaxy pushing poll trutherism

Wayne Swan’s [remark last month](http://www.abc.net.au/news/2012-09-21/swan-attacks-republican-cranks-and-crazies/4273300) that the US Republican Party had been taken over by “cranks and crazies” is notable in two respects.

First, it is true.

Second, it marks a further move towards a globalised politics, in which political arguments routinely transcend national boundaries.

The truth of Swan’s claim is so obvious that few, even in Australia, have bothered to dispute it. The following are just a sample of the lunatic beliefs held by much of the Republican Party base, propounded on its news outlets such as Fox News, and put forward by leading Republican politicians:

* That President Obama is a [foreign-born Muslim](http://www.mediaite.com/online/new-poll-shows-conservative-republicans-increasingly-believe-obama-is-muslim/), a rabid [socialist](http://www.huffingtonpost.com/2012/06/04/obama-socialist-claim-history_n_1568470.html) and more [sympathetic to jihadists](http://news.yahoo.com/michele-bachmanns-mccarthy-esque-hunt-islamist-infiltrators-guide-182000777.html) than to the United States.
* That scientific evidence on climate change is the product of a global conspiracy aimed at imposing a UN-dominated [world government](http://www.foxnews.com/story/0,2933,575565,00.html).
* That opinion polls showing Republican candidate Mitt Romney trailing President Obama [have been rigged](http://theweek.com/article/index/234067/the-polls-are-not-rigged–theyre-just-nuanced) in the hope of depressing the turnout of Republican voters.

While not all Republicans believe all of these things, few, if any, have been willing to repudiate these conspiracy theories and their advocates. Mitt Romney, for example, has [equivocated on climate change](http://www.cbsnews.com/8301-503544_162-20127273-503544/mitt-romneys-shifting-views-on-climate-change/), [embraced "birthers"](http://www.reuters.com/article/2012/05/30/us-usa-campaign-idUSBRE84S19O20120530) such as Donald Trump and, through his campaign organisation, promoted [opinion poll denialism](http://www.americanthinker.com/blog/2012/09/can_the_polls_be_believed.html).

The view that the Republican Party has been captured by cranks and crazies is not confined to Democrats or even centrists. Leading conservatives such as [David Frum](http://nymag.com/news/politics/conservatives-david-frum-2011-11/), speechwriter for George W. Bush and [Bruce Bartlett,](http://workingreporter.com/wordpress/?p=1053) domestic policy adviser to President Ronald Reagan have said the same thing, in equally blunt terms.

Even the remaining conservative intellectuals who deny the “crazy” claim do so in a half-hearted fashion. New York Times columnist [Ross Douthat argues](http://www.nytimes.com/2012/03/11/opinion/sunday/douthat-the-responsible-republicans.html) that Romney’s success in claiming the Republican Presidential nomination, after half a dozen manifestly crazy candidates had held the lead at one time or another, proves that the Republican base is not entirely crazy. Others, such as [Stephen Bainbridge](http://www.professorbainbridge.com/professorbainbridgecom/2011/11/this-country-is-going-to-hell-in-a-handbasket.html), engage in _tu quoque_, picking isolated instance of Democratic silliness to suggest that both sides are crazy. Both approaches have proved unconvincing.

Accurate as Swan’s remarks are, it would have been surprising, until relatively recently to see an Australian leader make such comments about US politics. The etiquette that “politics stops at the water’s edge” precluded both comments on domestic politics while travelling overseas, and on the domestic politics of other countries.

Such niceties have ceased to be relevant in a world of massive and instantaneous communication. For practical purposes, any comment, wherever it is made, is addressed to the world as a whole. More significantly, political debate has been globalised. In particular, the “cranks and crazies” who dominate the US Republican Party, along with the right wing of the Tory party in the UK, inform the thinking of much of the Australian right-wing commentariat.

The Republican conspiracy theory about opinion polls was only days old when it appeared on Australian right-wing blog sites. Writing in Quadrant, once the voice of high-toned intellectual conservatism, Steve Kates [called President Obama](http://www.quadrant.org.au/blogs/qed/2012/09/america-s-last-hurrah) “a socialist of the most radical leftist kind”. This is an absurd description of a centrist Democrat who wasted much of his first term seeking a “grand bargain” with the Republican party to reduce social welfare expenditures while modestly increasing taxes. And of course, climate conspiracy theories, recycling material derived from the US, are run of the mill material for the Australian right.

Some on the Australian right are more circumspect, in a manner that might be described as “cafeteria crazy”. That is, they accept a full-blown conspiracy theory regarding climate change, in which Obama, and most other world leaders, scientific organisations and so on, are embroiled in a plot to enslave the free peoples of the world. On the other hand, they indignantly reject birtherism, and get uncomfortable when the list of climate change plotters is extended to include the Rothschilds, the Royal Family and so on.

It’s fair to observe that the globalised Republican brand of craziness is not the only one in the market. Most obviously, there is the mirror-image brand of militant Islamism, circulating on websites and mailing lists out of the view of most Australians. At a much lower level, there are silly ideas propagated in some leftwing circles, from 9/11 “trutherism” to the wilder fringes of the environmental movement. But, unlike the case with the Republicans, neither of these brands of crazy has a significant presence in mainstream politics, either here or in the US.

A globalised world produces globalised politics. At one time, criticism from “overseas” (the very term recalls an long-vanished world of sea voyages), would have been largely counterproductive, producing a united reaction against outside interference.

But the US reaction to Swan’s remarks has been on predictably partisan lines. Democratic-leaning bloggers such as Paula Gordon on [The Huffington Post](http://www.huffingtonpost.com/paula-gordon/feint-praise_b_1908595.html) have endorsed Swan. The fact that Australian politicians rarely make such remarks has been cited, not as a criticism of Swan, but as evidence that Republican extremism has gone beyond any normal bounds.

Conversely, right-wing US sites have attacked Swan in much the same terms as they do their domestic opponents. Exactly the same responses, with sides reversed, greeted Israeli PM Netanyahu’s attack on Obama, and, going back a few years, George Bush’s criticism of Mark Latham.

In practical terms, the re-election of the Obama Administration, which now seems highly likely, would constitute a substantial win for the Australian Labor Party. And a surprise victory for the Republicans would be a win for Tony Abbott and his Republican-style politics of culture war.

In a globalised world, there is no meaningful “water’s edge” and politics no longer respects national boundaries.