Toxic projects

John Quiggin10 Comments

The announcement that Lend Lease is pulling out of a joint venture bid with Aurizon (the former Queensland Rail freight arm) to participate in the expansion of the Abbot Point coal terminal comes shortly after the Great Barrier Reef Marine Park Authority has approved a proposal to dump dredge spoil from the Abbot Point coal terminal expansion in the marine park area. (The government’s go-to guy for “independent” ethical clearances, Robert Cornall[1], assures us that there were no conflicts of interest arising from the presence of coal companies executives and employees on the Board. Then he had to rush off to whitewash investigate the conduct of the government and its agents on Manus Island).

On normal commercial calculations, this decision ought to have made the project more appealing. But the Lend Lease statement withdrawing from the project included the slightly gnomic observation that “Lend Lease remained committed to applying “rigorous due diligence” and considering the environmental impacts of all it projects,” it’s reasonable to infer that the decision made the project more toxic rather than less. The obvious reasons
* Coal projects are attracting more and more opposition, but it’s always possible for the proponents of one project to say that if theirs didn’t go ahead, another, possibly worse one, would. By contrast, when a government that’s busy revoking World Heritage Status announces that the project will involve dumping waste in a sensitive marine park, any company that cares about its public image is going to run a mile
* Given the obvious PR costs, the fact that the proponents went for this, rather than looking for a more expensive but less politically toxic approach to waste disposal suggests that the project is economically marginal, an inference supported by the earlier abandoment of a more ambitious version involving Rio Tinto and BHP.

An obvious follow-on project is: who is financing these projects. It looks as if all the major Australian banks are involved to some extent. Westpac is already running into trouble in New Zealand for financing coal mines in sensitive areas. As major international banks, particularly development banks, start dumping toxic projects like this, the Oz banks are likely to find themselves with a lot of undiversifiable risk.

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fn1. Breaking usual protocols, I’ve linked to the Oz. When the Murdoch press calls someons a “Howard defender” and strongly implies that he’s stooge, I think it’s safe to say that the appearance of independence is compromised.

The uselessness of privatisation “safeguards”

John Quiggin16 Comments

Telstra is lining up behind Qantas for the removal of restrictions on foreign ownership. It’s worth mention that these annoying “restrictions” were marketed to the public as “safeguards” when these enterprises were privatised in the 1990s. As I said at the time

Based on past experience, it seems unlikely that restrictions on foreign ownership will ultimately be effective. The effect of the ‘safeguards’ in the Telstra (Dilution of Ownership) Bill will be to reduce the sale price obtained by taxpayers while obscuring the fact that the ultimate outcome of privatisation will probably be either a foreign-controlled monopoly in telecommunications or a duopoly consisting of two foreign-owned firms.

Current and recent proposals for the sale of state-owned electricity assets have been pushed with safeguards of this kind, which achieve nothing. If it’s OK to privatise a business, it’s OK, and indeed obligatory, to sell it to the highest bidder. For obvious reasons, this will usually a foreign multinational in the same line of business.

Pot, meet kettle

John Quiggin80 Comments

Andrew Bolt has a column (no link) in which he attacks a number of Marxist academics on the basis that they are morally responsible for all the crimes committed by Marxist regimes, regardless of their personal attitude to those regimes. Rather than explore the problems with this kind of cliam, I’ll point out that

* The Iraq war, launched on the basis of lies, resulted in the deaths of hundreds of thousands of people, and left millions homeless

* Bolt eagerly supported the war and propagated the lies told to justify it

* Bolt derided and defamed those who correctly predicted its disastrous consequences

* Even when it was obvious that the death toll from the war was huge, and certain to grow further, Bolt continued to lie, and offered no apology to those he had defamed

* To this day, Bolt has continued to defend the war, and failed to acknowledge the falsehood of the claims he made in its support

Bolt is in exactly the same moral position as an unrepentant apologist for Stalinism or Maoism.

Electricity privatisation in Australia: A record of failure (updated with link)

John Quiggin42 Comments

That’s the title of a report I’m releasing at Parliament House in Brisbane today, commissioned by the Victorian branch of the Electrical Trades Union. It’s essentially a synthesis of 20 years of work on this topic, going back to my book Great Expectations: Microeconomic Reform and Australia and including case studies of the various states where privatisation proposals have been put forward, with varying results. As well as privatisation, I look at the related market reform process which gave rise to the National Electricity Market. I view the reforms as having been fundamentally misconceived, relying on prices to perform a range of incompatible functions, while leaving retail prices largely unrelated to the actual cost of electricity generation and distribution.

Here’s a link to the report

Unmasking Austerity

John Quiggin57 Comments

I’ll be at Unmasking Austerity in Adelaide on Tuesday. I’m going to talk about Commissions of Audit and the following question occurred to me.

Have such Commissions ever achieved anything of the kind you might expect from auditors, that is, detecting and fixing Fraud, Inefficiency and Waste? In this context, I’m not interested in proposals to kill government programs the Commissioners don’t like, privatise public assets, contract out public sector work and so on. I am interested in work showing that public programs are being defrauded and proposing checks that would fix the problem, cases of duplication between agencies and levels of government that can be fixed with substantial savings, cases where governments are wasting money by paying obviously excessive prices for services etc.

The tooth fairy and the traditionality of modernity

John Quiggin67 Comments

Salon magazine reports another instance of CP Snow’s observation that all ancient traditions date from the second half of the 19th century. This time, it’s the Tooth Fairy. As you would expect, the Tooth Fairy turns out to be a codification and modification of a bunch of older local practices, many involving a mouse or rat.

This seemed like a good time to rerun one of my posts that stirred up plenty of trouble at the time, making the point that we are “now living in a society that’s far more tradition-bound than that of the 19th Century, and in some respects more so than at any time since at least the Middle Ages”.

I’ll just add that CP Snow was writing in the 1950s, pretty much equidistant between the late 19th century and the present day, strengthening my observation that the “invention of tradition” is now something of a traditional concept (though the phrase itself, due to Hobsbawm and Ranger, is a mere 30 years old).
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Alanna Skelly petition

John Quiggin48 Comments

Also, reposting this petition appeal from Alanna Skelly, who used to comment here as “Alice” and “Alanna Hardman”. Please keep discussion thoughtful and civil

Hello!

I’ve started the petition “Tony Abbott: Stop all our banks accommodating BITCOIN transactions.” and need your help to get it off the ground.

Will you take 30 seconds to sign it right now? Here’s the link:

http://www.change.org/petitions/tony-abbott-stop-all-our-banks-accommodating-bitcoin-transactions

Here’s why it’s important:

Please stop BITCOIN in Australia because our youth are using this method to buy drugs from online sites across the globe. The drug sellers are mushrooming becausing BITCOIN is operating a tumbler style of making the ultimate recipient of the drug money untraceable. Our children are dying. Children in the US are dying. Please support this petition because I have just lost my twenty one year old son to the online drug trade. Its not the little fish the police need to go after. First stop BITCOIN from hiding these criminals. Make it illegal for any Australian financial institution to deal with BITCOIN accounts. Without the might and IT expertise of BITCOIN these criminals who despatch toxic substances can not hide themselves. The beautiful kind hearted boy in this photo has died before he should have. This petition has been written by his mother.

You can sign my petition by clicking here.

Thanks!
Alanna Skelly