Given that we’ve been discussing the transparency or otherwise of public processes, I was interested to get an email saying that ASIO is to get a new headquarters, built on the shores of Lake Burley Griffin. Apparently the public consultation process consisted of some documents posted, for the statutory 10 days, on a Dept of Finance website under the title ‘EPBC referral 2009/8414 Commonwealth new building project’. The project was quietly approved by the Howard Government in 2005 and exempted from oversight by the joint parliamentary public works committee. The Rudd Government continued the secrecy.

You can get links to more info here.

• The Transporter film

With Turnbull seemingly doomed, the great sport of Costello-watching gets one last (or maybe not) run onto the field. Will the Libs turn in desperation to the Eternal Bridesmaid, and persuade him to return to the fray? There is a favorable recent precedent with the WA Libs, who persuaded Colin Barnett to reverse a decision to quit, and went on to gain office under his leadership.I’ve never rated Costello, but then, I didn’t (and don’t) think much of Barnett, either.

The big problem for the Libs, I think, is that the Grech scandal goes a long way deeper than Turnbull. Eric Abetz and Joe Hockey are obviously implicated, for example, and the chain of links seems likely to go to Costello as well. And while, as numerous commenters have pointed out, leaks from public servants to Opposition politicians are not that unusual, each such leak constitutes a criminal offence. It’s the kind of thing that “everybody does” from time to time, but it’s only OK if you don’t get caught. Add forgery to the mix, and you’ve got a disaster.

The Great Ute Scandal has been bubbling along for weeks but I ignored it, partly because scandals are rarely interesting and partly because I couldn’t get to the starting point of working out what wrongdoing was supposed to have taken place (compare for example the Manildra business, which involved large sums of public money and provoked no serious concern). But in the last day or two the stakes have been raised dramatically, based on the alleged email from the PM’s office urging a prompt response to the concerns of a car dealer who contributed a car to Rudd’s campaign.

Whatever the significance of the putative email may have been, Rudd’s outright denial that any such email was sent means that it will be a major crisis for him if the email turns up, and possibly a terminal one if it turns out that the email was suppressed. On the other hand, if it can be proved that the email published by the Telegraph and referred to by Turnbull was in fact a fake, the consequences will be dire for Turnbull at least (I don’t suppose the Tele could lose much credibility). As my recent spam crisis demonstrates, I’m no tech expert, but I would have thought that the headers on an email would make it pretty easy to check whether it had been sent and that erasing all trace of an email would be just about impossible. And it would be grossly irresponsible to publish an alleged email if you received it with the identifying info removed.

Update

The news that the email was a fake confirms that the outcome will be bad for Turnbull, and could be catastrophic. The worst case, but a plausible one on the evidence to hand, is that the email was the product of a fraud cooked up between Liberal staffers and one or more corrupt Treasury officials. Even the best case, that the email was fabricated for some personal reason, and passed to the Liberals along with other leaks about the car scheme, doesn’t look good. I guess, given the twists and turns so far, it’s also necessary to consider the Machiavellian possible of a (highly successful) agent provocateur, luring Turnbull into a trap, as happened (IIRC) with Ralph Willis in 1996.

Further update

It now appears that the worst-case scenario is pretty close to the truth. Grech has apparently been working as a source of leaks to the Liberal party for a long period*. Apart from the obvious disastrous implications for the Liberals, this point also casts doubt on what remains of the case against Swan. If Grech was working for the Libs all along, he could easily have generated a large volume of emails, reports and so on, without any particular pressure from the government

* The term “mole” is commonly used in such cases, but the original idea of a mole was one of an agent in place who did nothing but burrow nto the target organisation, waiting for the time to act.

The departure of Defence Minister Joel Fitzgibbon is, on balance, good news for the Rudd government. Most importantly, in the first real test case, Rudd has stuck to his ministerial standards rather than bend the rules for a close ally. Fitzgibbon had received the benefit of the doubt a couple of times, but allowing his office to be used by a family member for lobbying was just too much. (Note the family motif in most of Fitzgibbon’s problems – another argument against hereditary MPs).

A scandal of this kind is never good, but such things are inevitable. That the Rudd government has suffered only one such loss after 18 months in office compares very favorable with state Labor governments and with the Howard government, which lost a string of ministers and Parliamentary secretaries before Howard threw out the rules to save Warwick Parer – after that, there was scarcely a member of the Cabinet who wasn’t implicated in some kind of corrupt or dodgy dealing.

Finally, if there’s any truth to the claim that Defence staff were undermining Fitzgibbon to block his reform agenda, they scored a Pyhrric victory here. John Faulkner is going to cause them much more grief than Fitzgibbon ever could.

Big news just now. The Bligh government has abolished the fuel subsidy with effect from 1 July, and announced the sale of a huge range of asset s, with QR coal freight, Port of Brisbane and others to be privatised.

I support the first of these measures (with marginal regret that they didn’t take up my idea for a phase-out starting five years ago when I first put it up).

As for the asset sales, they need to be evaluated on a case by case basis. A crucial requirement is a high reserve price and a willingness to retain the asset in public ownership if this price is not realised. In the current environment, the government’s estimates look optimistic, but I haven’t seen any detail yet.

A detailed response to come, when I get a free moment.

Update: I just did an interview for 7:30 report, so you may get to hear a minute or so of my thoughts on the subject tonight

A comment reminded me that I hadn’t posted last week’s Fin article, advocating abolition or phasing out the fuel subsidy in Queensland> It’s over the fold. Also, since letters about me in the Fin usually have a heading like “Quiggin wrong”, or worse, let me thank Greg McKenzie whose letter commenting on the article was headed “Quiggin the best”. Thanks!

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No group in the community greeted the election of the Rudd government with more enthusiasm and more relief than the higher education and research sector. The Howard government had treated the sector to a decade of ideologically motivated cutbacks combined with a tribal history which reflected, in large measure, the defeats and slights its members had endured as student politicians in the 1970s and 1980s. The number of places for domestic students was effectively frozen for most of the Howard era, reflecting both a desire to pressure the universities into offering full-fee places and a belief that Australia did not really need a more educated workforce.
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If not for the drastic downward revision of expectations that has taken place since the financial meltdown of September-October 2008, the Budget’s forecasts for global economic conditions would look exceedingly gloomy. As it is, they look to be based on a fairly rosy scenario, in which advanced countries experience a GDP contraction of just under 4 per cent in 2009 before stabilising in 2010 and recovering in 2011.
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In the Sherlock Holmes story, Silver Blaze, the crucial clue was that of the dog that did not bark in the night. In the 2009-10 Budget, tax policy is surely the dog that did not bark. Despite the near-unanimous view of the economics profession that the tax cuts promised at the 2007 election, irresponsible even at the time, should now be scaled back or deferred, the government made no move in this direction, preferring to achieve a somewhat similar outcome by tightening means tests for higher income earners.
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The budget projects that, despite the effects of the stimulus package, unemployment in Australia will reach 8.5 per cent next year. It’s striking then, how little the budget contains in terms of measures specifically directed at improving the lot of the unemployed. Most obviously, unemployment benefits have not been increased, further widening the gap between these benefits and other pensions. In an environment where suggestions that unemployment is partially or wholly voluntary can no longer be sustained, it is hard to avoid a feeling of injustice here.

The direct response to unemployment in the budget amounts to $1.5 billion for the Jobs and Training Compact, much of which has already been announced or foreshadowed. The main focus is on training, which is good long term policy, but may not be all that helpful in a recession.

Most of the timing, training is the best way of making people more employable. A lengthy recession strengthens the case for participation in school, university or TAFE diploma courses.

If the labour market is weak, the option of staying in school, or of going back to university or TAFE to enhance your qualifications is more attractive. It’s safe to predict that demand for tertiary education places is going to be quite a bit higher for the next few years. Even with the expansion of places announced in the budget, it is likely that the number of qualified students unable to find a university place will increase in 20101.

On the other hand, short-term training programs directed at those who are already unemployed are of little use in recessions. When few employers are hiring, those who do so can pick and choose from a pool of experienced and qualified candidates. A training course of a few months is unlikely to move an unemployed person to the front of the queue.

In a sustained recession, there is a strong case for direct job creation, targeted at the unemployed. In addition to existing infrastructure projects the government is offering a $650 million Jobs Fund, designed to ‘support local jobs in areas hardest hit by the downturn’.

While welcome, the government’s measures represent a small fraction of the expenditure allocated to the Keating government’s Working Nation program. As with other responses to the 1989-90 recession, Working Nation was not introduced until high unemployment was firmly entrenched. The Rudd government’s limited steps in this respect contrast unfavorably with its rapid, indeed pre-emptive, adoption of fiscal stimulus policies.