Alice Springs' notorious Aboriginal town camps will be compulsorily acquired by the Rudd Government after Indigenous Affairs Minister Jenny Macklin said she could no longer tolerate the "appalling living conditions" and endemic violence some 2000 residents are forced to endure.
Several weeks ago, Ms Macklin met Aboriginal women in Hoppy's Camp, one of the worst camps. She said she saw about 50 people living under a shelter with no walls.
"They were living in filthy conditions. One parent raised with me the enormous problems with cockroaches. They were waking up in the morning with cockroaches all over the children.
"The conditions in these camps are horrific, I can't put it any more plainly," she said.
An exasperated Ms Macklin said the time for negotiation was over. "Today, I am giving notice we intend to acquire (the land)."
Saturday, May 30, 2009
Confirming my prejudices
Apologies for a light post this weekend. I appear to have formed quite a number of fixed ideas about St Kevin, his motives, his world-view, and his behaviour, so that my reaction to news about him is now more 'well, that's in keeping with his character', than 'I'll have to write a post about that!'
For example, who could be surprised to learn this week that the Haloed One had banished the former head of the international section at the Prime Minister's department to Stockholm, a relatively minor posting compared to Berlin, the one originally offered to him?
St Kev has dismissed talk of this as being his punishing a bureaucrat that he doesn't happen to like as rubbish with the line that Mr Borrowman's German is substandard, and therefore he isn't fit for a position in the German embassy.
This. Is. Rubbish. Don't you believe it. Let's go through some reasons why.
It's just not true. By the government's own admission:
Mr Rudd's claims on Tuesday that he rejected Mr Borrowman's credentials for the Berlin post because of inadequate language skills was contrary to a statement five days earlier from Mr Smith singling out his proficiency in German, Swedish and Mandarin, Ms Bishop said.
Not all people appointed to embassies speak the language of the country to which they have been posted. Some do, but not all - that is my understanding.
Foreign Affairs has an excellent language training program. If speaking German is so important for the position, then why not send Mr Borrowman there for a couple of months of intensive German, to tighten up his skills?
Like many workplaces, Foreign Affairs has its Important Jobs and Backwater Jobs, and a successful career will likely see a person occupying a few of the Important Jobs as he or she works their way up the greasy pole. Berlin is clearly an Important Job, and is offered as a plum to those who have done well or deserve reward or who have been Marked For Greater Things, language skills notwithstanding. Stockholm is clearly a Backwater Job. St Kevin's decision is all about taking a plum away from Mr Borrowman and putting him in a Backwater Job.
No, this decision had nothing to do with Mr Borrowman's language skills. It is all about a petty man abusing his position to settle a score with someone who crossed him in some way.
Which is exactly the behaviour you would expect from someone who would chuck a tantie over a lamb dinner, or a missing hairdryer.
No wonder they can't find a replacement for Mr Borrowman.
Then we learn, via the Senate Estimates process, that the $43 billion plan for a national broadband network was cooked up on a couple of plane trips that Nanny Conroy took with St Kevin after it was clear that the tender process had failed. No cost benefit analysis. No estimates of demand, of the responses of other media and technology players. Just a couple of Labor party hacks deciding to spend an amount of money nearly nine times the amount spent on the Snowy River Scheme on an election promise.
Then we get the madness of the hard hats and fluoro jackets, as St Kevin pops up out of the ground like a mole at building sites all over the country. Surely, work as important and costly as this has been subjected to rigorous financial analysis?
The Rudd-Albanese strategy is clear. Between now and voting day the Prime Minister and his Infrastructure Minister, Anthony Albanese, plan a "shock and awe" campaign with an onslaught of Labor MPs in hard hats advancing electorate by electorate armed with the heavy artillery of localised infrastructure projects paid for by government.
But there will inevitably be an Opposition counterattack and the shape of that response is already taking shape.
It should begin with questions about the transparency of this entire $22 billion enterprise. Infrastructure Australia, the arms-length body headed by Labor's handpicked business favourite, Rod Eddington, "chose" an initial "A" list of 10 projects in the budget for immediate go-ahead.
But there's a remarkable omission in all of this. Neither in the budget papers, nor in the National Infrastructure Priorities list published by the Government, nor on the Infrastructure Australia website is there any supporting cost benefit analysis of any of the chosen projects. None.
The Government is simply asking voters and the private sector to take them on trust. To say groups such as the Business Council of Australia are worried by such an approach is an understatement. They are now demanding the numbers that underpinned the choice of the selected projects be published so it can assess, on behalf of voters, how much productivity bang they're going to get for their buck.
Their chances don't look good. A spokesman for Albanese told this column yesterday that while the economic analysis in question was in the hands of Infrastructure Australia it could not be released because it is "commercial in confidence".
Which really means the Government plans to spend $22 billion of taxpayers' money without any explanation as to the viability of that spending. All of which made for a somewhat uncomfortable interview between Eddington and Alan Kohler on the ABC's Inside Business program yesterday.
Kohler made it clear he was less than impressed with the Infrastructure Australia budget process, to which Eddington could only reply: "We put forward the submissions we felt met all the criteria and where the work had been done with the rigour that we demanded and, to be frank, the Prime Minister and the Infrastructure Minister demanded."
Well that's great. But it's also a hard proposition to test without public access to the calculations supporting the spending. Especially when you get critiques like this from experts such as Paul Mees, senior lecturer in transport planning at the Royal Melbourne Institute of Technology, who's cast his eye over the budget funding for the Melbourne Regional Rail Link.
"The Victorian Government adopted the Eddington regional rail link proposal and forwarded it directly to the federal advisory body Infrastructure Australia, chaired by none other than Rod Eddington," Mees says.
You can add into this opaque process some unusually loose words on the planned national broadband rollout from the usually highly disciplined Finance Minister, Lindsay Tanner, during a week obscured by the budget babble. Tanner told the online finance news service Business Spectator that the estimated $43billion cost was the "outer limit", which included "a sizeable chunk of contingency built into it".
A couple of people have wised up in the last few days to the charade. Mark Thomson, from the Australian Strategic Policy Institute, has questioned the spending plans behind the defence white paper:
"We risk adopting a defence posture that is more talk than action," says the report. [What, like the Prime Minister? ed] "Having made the case, albeit elliptically, that we need to hedge against the rise of the Middle Kingdom [China], [the white paper] presents a response that will take decades to take form … The focus on the far-term comes at the expense of almost any information about what Defence will deliver in the meantime."
Then there is the frank appraisal of the Prime Minister coming from Beijing.
"We truly want Australia, which we view as a middle power, to play a bigger role internationally," he said.
"I think Mr Rudd's proposal for an Asia-Pacific community is brilliant, and has earned solid support from China. But there has been no follow-up. Nothing substantial is happening to take it further."
He said that "perhaps we should focus on Mr Rudd as a politician".
"He offers words that can be very touching, but may not be taken too seriously,"
You don't say!
He said that Mr Rudd "came up with a lot of thoughts".
"But how to put them into effect? Maybe he's just too much entangled in domestic politics.
A bit like the defence white paper, and the broadband network. And the infrastructure projects.
You see, St Kevin's workaholism is nothing more than constant movement and frittering away time on trifles. He doesn't have an appetite for hard work - planning, discussing alternatives, ironing out small but crucial details, nutting out costs and benefits, listening to dissenting opinions and forging a consensus. This is too hard. Better to think of a grand plan, sell it by wearing a hard hat, place it on the national credit card, and leave it to others to work out the details and pay for it later.
This flippancy and pettiness are going to cost us.
For example, who could be surprised to learn this week that the Haloed One had banished the former head of the international section at the Prime Minister's department to Stockholm, a relatively minor posting compared to Berlin, the one originally offered to him?
St Kev has dismissed talk of this as being his punishing a bureaucrat that he doesn't happen to like as rubbish with the line that Mr Borrowman's German is substandard, and therefore he isn't fit for a position in the German embassy.
This. Is. Rubbish. Don't you believe it. Let's go through some reasons why.
It's just not true. By the government's own admission:
Mr Rudd's claims on Tuesday that he rejected Mr Borrowman's credentials for the Berlin post because of inadequate language skills was contrary to a statement five days earlier from Mr Smith singling out his proficiency in German, Swedish and Mandarin, Ms Bishop said.
Not all people appointed to embassies speak the language of the country to which they have been posted. Some do, but not all - that is my understanding.
Foreign Affairs has an excellent language training program. If speaking German is so important for the position, then why not send Mr Borrowman there for a couple of months of intensive German, to tighten up his skills?
Like many workplaces, Foreign Affairs has its Important Jobs and Backwater Jobs, and a successful career will likely see a person occupying a few of the Important Jobs as he or she works their way up the greasy pole. Berlin is clearly an Important Job, and is offered as a plum to those who have done well or deserve reward or who have been Marked For Greater Things, language skills notwithstanding. Stockholm is clearly a Backwater Job. St Kevin's decision is all about taking a plum away from Mr Borrowman and putting him in a Backwater Job.
No, this decision had nothing to do with Mr Borrowman's language skills. It is all about a petty man abusing his position to settle a score with someone who crossed him in some way.
Which is exactly the behaviour you would expect from someone who would chuck a tantie over a lamb dinner, or a missing hairdryer.
No wonder they can't find a replacement for Mr Borrowman.
Then we learn, via the Senate Estimates process, that the $43 billion plan for a national broadband network was cooked up on a couple of plane trips that Nanny Conroy took with St Kevin after it was clear that the tender process had failed. No cost benefit analysis. No estimates of demand, of the responses of other media and technology players. Just a couple of Labor party hacks deciding to spend an amount of money nearly nine times the amount spent on the Snowy River Scheme on an election promise.
Then we get the madness of the hard hats and fluoro jackets, as St Kevin pops up out of the ground like a mole at building sites all over the country. Surely, work as important and costly as this has been subjected to rigorous financial analysis?
The Rudd-Albanese strategy is clear. Between now and voting day the Prime Minister and his Infrastructure Minister, Anthony Albanese, plan a "shock and awe" campaign with an onslaught of Labor MPs in hard hats advancing electorate by electorate armed with the heavy artillery of localised infrastructure projects paid for by government.
But there will inevitably be an Opposition counterattack and the shape of that response is already taking shape.
It should begin with questions about the transparency of this entire $22 billion enterprise. Infrastructure Australia, the arms-length body headed by Labor's handpicked business favourite, Rod Eddington, "chose" an initial "A" list of 10 projects in the budget for immediate go-ahead.
But there's a remarkable omission in all of this. Neither in the budget papers, nor in the National Infrastructure Priorities list published by the Government, nor on the Infrastructure Australia website is there any supporting cost benefit analysis of any of the chosen projects. None.
The Government is simply asking voters and the private sector to take them on trust. To say groups such as the Business Council of Australia are worried by such an approach is an understatement. They are now demanding the numbers that underpinned the choice of the selected projects be published so it can assess, on behalf of voters, how much productivity bang they're going to get for their buck.
Their chances don't look good. A spokesman for Albanese told this column yesterday that while the economic analysis in question was in the hands of Infrastructure Australia it could not be released because it is "commercial in confidence".
Which really means the Government plans to spend $22 billion of taxpayers' money without any explanation as to the viability of that spending. All of which made for a somewhat uncomfortable interview between Eddington and Alan Kohler on the ABC's Inside Business program yesterday.
Kohler made it clear he was less than impressed with the Infrastructure Australia budget process, to which Eddington could only reply: "We put forward the submissions we felt met all the criteria and where the work had been done with the rigour that we demanded and, to be frank, the Prime Minister and the Infrastructure Minister demanded."
Well that's great. But it's also a hard proposition to test without public access to the calculations supporting the spending. Especially when you get critiques like this from experts such as Paul Mees, senior lecturer in transport planning at the Royal Melbourne Institute of Technology, who's cast his eye over the budget funding for the Melbourne Regional Rail Link.
"The Victorian Government adopted the Eddington regional rail link proposal and forwarded it directly to the federal advisory body Infrastructure Australia, chaired by none other than Rod Eddington," Mees says.
You can add into this opaque process some unusually loose words on the planned national broadband rollout from the usually highly disciplined Finance Minister, Lindsay Tanner, during a week obscured by the budget babble. Tanner told the online finance news service Business Spectator that the estimated $43billion cost was the "outer limit", which included "a sizeable chunk of contingency built into it".
A couple of people have wised up in the last few days to the charade. Mark Thomson, from the Australian Strategic Policy Institute, has questioned the spending plans behind the defence white paper:
"We risk adopting a defence posture that is more talk than action," says the report. [What, like the Prime Minister? ed] "Having made the case, albeit elliptically, that we need to hedge against the rise of the Middle Kingdom [China], [the white paper] presents a response that will take decades to take form … The focus on the far-term comes at the expense of almost any information about what Defence will deliver in the meantime."
Then there is the frank appraisal of the Prime Minister coming from Beijing.
"We truly want Australia, which we view as a middle power, to play a bigger role internationally," he said.
"I think Mr Rudd's proposal for an Asia-Pacific community is brilliant, and has earned solid support from China. But there has been no follow-up. Nothing substantial is happening to take it further."
He said that "perhaps we should focus on Mr Rudd as a politician".
"He offers words that can be very touching, but may not be taken too seriously,"
You don't say!
He said that Mr Rudd "came up with a lot of thoughts".
"But how to put them into effect? Maybe he's just too much entangled in domestic politics.
A bit like the defence white paper, and the broadband network. And the infrastructure projects.
You see, St Kevin's workaholism is nothing more than constant movement and frittering away time on trifles. He doesn't have an appetite for hard work - planning, discussing alternatives, ironing out small but crucial details, nutting out costs and benefits, listening to dissenting opinions and forging a consensus. This is too hard. Better to think of a grand plan, sell it by wearing a hard hat, place it on the national credit card, and leave it to others to work out the details and pay for it later.
This flippancy and pettiness are going to cost us.
Sunday, May 24, 2009
Delusions of grandeur, difficult realities not addressed
I reflected a little, before dropping off to sleep, on what I had written yesterday.
St Kevin may truly have 'jumped the shark' with his performance during and since the budget.
The first thing is, this is a lazy budget. In a surprisingly good budget in reply speech, The Terminator mentioned that despite creating a $58 billion deficit, St Kevin and Brother Wayne had managed to find less than $2 billion in savings.
$2 billion, in a budget of around $300 billion! That's less than 1 per cent!
Rather than doing the hard work in identifying budget savings, Kevin was preoccupied early this year writing his execrable essay for the Monthly. His priorities aren't straight.
Follow this with the plain idiocy of squirming around in an attempt to avoid mentioning the size of the net and gross debt figures, and the hard people of the party, not to mention the backbenchers, must be shaking their heads wondering what on earth their leader is up to. The electorate certainly is.
Especially, if reports are to be believed, St Kev plans to use the Prime Ministership as a stepping stone to leadership of the UN.
His interests aren't exactly aligned with theirs. Nor with the interests of the electorate.
Meanwhile, the economy, and the budget, continue to deteriorate. We will likely be paying for St Kevin's Gaullist delusions of grandeur for a long time to come.
St Kevin may truly have 'jumped the shark' with his performance during and since the budget.
The first thing is, this is a lazy budget. In a surprisingly good budget in reply speech, The Terminator mentioned that despite creating a $58 billion deficit, St Kevin and Brother Wayne had managed to find less than $2 billion in savings.
$2 billion, in a budget of around $300 billion! That's less than 1 per cent!
Rather than doing the hard work in identifying budget savings, Kevin was preoccupied early this year writing his execrable essay for the Monthly. His priorities aren't straight.
Follow this with the plain idiocy of squirming around in an attempt to avoid mentioning the size of the net and gross debt figures, and the hard people of the party, not to mention the backbenchers, must be shaking their heads wondering what on earth their leader is up to. The electorate certainly is.
Especially, if reports are to be believed, St Kev plans to use the Prime Ministership as a stepping stone to leadership of the UN.
His interests aren't exactly aligned with theirs. Nor with the interests of the electorate.
Meanwhile, the economy, and the budget, continue to deteriorate. We will likely be paying for St Kevin's Gaullist delusions of grandeur for a long time to come.
Saturday, May 23, 2009
Bits and pieces
Just some bits and pieces that I have picked up over the past couple of weeks.
On Nanny Conroy's broadband plan:
Lindsay Tanner has confirmed what was suspected. In arriving at its estimate that the cost of the revised national fibre-to-the-premises broadband network would cost $43 billion, the Rudd government essentially dreamed up a big number and then added to it.
Committing to spending up to $43 billion of taxpayer funds, perhaps more, perhaps less, without rigorous and detailed analysis and modelling of the economics of the network and its inter-action with existing broadband networks is extraordinary.
When one considers the time and effort Infrastructure Australia put into compiling its list of priority national infrastructure projects, the way the NBN decision was developed – essentially as a response to the failure of the original lengthy tender process that involved only $4.7 billion of taxpayer funds – is even more remarkable.
The evaluation that should have preceded the commitment will now occur, with the government commissioning an "implementation study", which one assumes will consider the complex economic issues involved and come to a conclusion whether the NBN is a viable commercial proposition.
And this:
OECD statistics used to support the government's $43 billion national broadband network also raise serious doubts about the prospects of a fibre-to-the-home project being sustainable without heavy ongoing subsidies...
... The minister has ignored statistics that raise doubts about whether the construction of a fibre network will be economically viable.
Data from other OECD countries with more advanced broadband networks than Australia show that consumers faced with a choice between fibre and high speed broadband over copper (ADSL2+) will not necessarily rush to connect to fibre.
On the Australian Building and Construction Commission:
There was never any real question about whether the ABCC would survive the first term of the Rudd government. Indeed, many industry observers are surprised that it will last to early 2010 given the trenchant union opposition to the organisation and the debt that the political wing owes its industrial brethren for making Work Choices electoral death for the Howard government.
But the pragmatic Gillard would privately know that the ABCC has brought industrial peace to the industry, as the updated 2009 Report on Productivity in the Building and Construction Industry released by the Master Builders Association last week makes abundantly evident.
It says in the executive summary: “All of this evidence supports the conclusion that there has been a significant gain in construction industry productivity. What remains is to identify whether or not the contribution from each source to the productivity gain can be separately isolated.
“The data sources … indicate that the significant productivity gains in construction industry productivity started to appear around 2002-03. This supports the interpretation that it was the activities of the Taskforce, established in October 2002 and, more importantly, the ABCC (given its enforcement powers) when it was established in October 2005 that made a major difference.”
Despite the unions’ claims to the contrary, the industrial peace has come without any undue impact of the industry’s safety record. From 2000-01 to 2005-06, workplace claims per 1000 employees fell from 31 to 25 and preliminary figures for 2006-07 put the figure at 22.
It's working, productivity is up, safety is still good, everyone is happy except the rent seeking bullies in the unions - so let's upset everyone just to please them! Great one St Kev. In another article:
Harder heads in the federal ministry and caucus, however, while privately conceding that the ABCC in its current form cannot survive, are deeply worried about what might happen in Victoria and WA once it has been abolished, and are anxious to ensure its successor can exert its authority over this industry.
They are acutely aware of the capacity of these two branches to cause industrial mayhem as witnessed in Victoria during the lengthy West Gate Bridge dispute.
You betcha! But it's not like they're going to do anything about it, are they, apart from wring their hands.
The stupidity of trying to define an alcopop in legislation, so as to tax it differently to other alcoholic products, hits home at makers of Belgian beers. Memo to Brother Wayne and the excise crew at Treasury - why not tax alcoholic beverages by alcohol content? That would solve all your problems.
Mitch Hooke of the Minerals Council of Australia brings in the heavy artillery, Brian Fisher, to do the analysis of the C"P"RS that Treasury should have done. No surprises in the conclusions:
The CPRS scheme will shed 23,510 jobs in the minerals sector by 2020 and more than 66,000 by 2030. These are direct jobs. All minerals sectors will be affected, whether in coal mining, gold and base metals, alumina refining, mining services, copper, zinc, lead and aluminium smelting and so on. No state, or the Northern Territory, will be spared, no mining region will be untouched. The impact on regional Australia will be severe, including thousands of jobs in the Illawarra and the Hunter in NSW, the Bowen Basin in Queensland, remote regions in Western Australia, including the Pilbara and Kalgoorlie, South Australia, Victoria's Latrobe Valley, Tasmania and the Northern Territory.
You can add to these numbers the jobs of the council workers, the school teachers, the nurses, gardeners, and employees in the hundreds of small businesses in the towns and communities that service these mining regions.
That's just the start, Mitch! Killing the mines will drag the rest of the economy down with it. And what will happen in the suburban shopping malls when the punters can't by plasma screen tellies, because we can't economically mine the minerals to pay for them? Revolution in the streets! Great idea Kev!
Then there's the budget, starting with the attack on employee share ownership schemes:
There are about two million Australian employees who have been gradually building up stakes in the companies where they work via what are called "qualifying" share schemes. They're pretty basic, and they work by getting the employee to buy shares out of pre-tax income, but then hitting them for income tax at the far end when they sell the shares, if they make a profit.
What's gobsmacked a lot of observers is how the Government has instantaneously alienated a big slab of middle Australia, the ordinary scheme participants, while laying itself open to the serious risk that revenue from those schemes was going to go down and not up.
The strangest element of all is that Swan himself has long been a champion of employee share schemes on the basis that they align the interests of the workers with the shareholders.
A lot of thought went into that one, yes? Again, as with private health insurance, the pensions, the C"P"RS, the support for the car industry, etc., St Kevin's ideological fetishes trump common sense and good policy.
Then there's St Kevin's promise to wear the hairshirt - next year, of course, not this year:
Opposition Treasury spokesman Joe Hockey highlighted his scepticism last night by ridiculing Mr Rudd's promise of a limit on growth in outlays, noting it would slap a virtual straitjacket on the Government for six years.
Insisting that no government would go to an election without spending initiatives, Mr Hockey said he did not believe Mr Rudd would stick to the commitment.
"There's no wriggle room for new spending in their assumptions," he told The Australian last night. "They've already broken this promise because they have promised 3 per cent real growth in defence spending a year."
Believe that promise, and you'll believe anything. Especially when it comes from a man who, despite claiming to be a fiscal conservative, and before his conversion to spend-a-thons, increased government spending by 13.5% - yes, that much! - in 2008-09.
Peter Costello warms to this theme:
"What I find extraordinary is (that) if there was all this unsustainable spending, why didn't he (Mr Swan) cut it in the last budget? Apparently last year he didn't think this was unsustainable and made no effort in relation to it at all," Mr Costello said.
"He has invented this in response to the fact that he has careered the budget into deficit."
Since handing down last year's budget, Mr Swan had committed to spend another $100 billion on economic stimulus packages and a national broadband network.
"This bloke has added $100billion to spending and then said it was unsustainable to start with."
Alan Wood, in the Oz, detects the same pattern emerging as RuddWatch has noticed, first here:
The Government is making much of the fact that, on the budget forecasts, almost all new spending will be offset in the final year of the forward estimates, 2012-13, putting it on track for a surplus in 2015-16, but it is hard to believe. The Government certainly sent the wrong signal with its decision to increase pensions in an allegedly tough budget intended to demonstrate its long-term fiscal prudence. Whatever the arguments about the adequacy of pensions, this wasn't the time to put them up.
I don't know what Treasury said to the Prime Minister and Treasurer about pensions in their pre-budget discussions, but I would be willing to bet it didn't support this increase. In fact, I wouldn't be surprised if it warned them that a rise threatened the credibility of their fiscal strategy. Remember, the Government flew a kite about backing off its pension promise in the run-up to the budget.
It rapidly retreated in the face of a hostile response from pensioners. This was politics, not good policy, with Labor safe in the knowledge that on this issue the Opposition was equally irresponsible, so it was free to follow its welfarist instincts...
...[I]n the next couple of years the Rudd Government will need to take much tougher measures to rein in the bloated entitlement spending that is the dark side of the Howard government's legacy than it has shown in this budget, and a much more disciplined and consistent policy approach than we have seen from this Prime Minister.
And then here:
The big threat here has nothing to do with economic growth forecasts. It has everything to do with Rudd's chaotic and unpredictable leadership style and his obsession with political spin. This is a Government that couldn't make the hard spending decisions in its first budget, has managed only a half-hearted effort in its second and is unlikely to do much in its third, an election budget.
It hardly inspires confidence it will turn into a strict fiscal disciplinarian if it wins a second term.
Paul Kelly links this clear and present problem to St Kevin's refusing to say the 'B' word:
This Government's communications problem can be summarised in one question: does anybody believe that a Prime Minister and Treasurer too frightened to announce the deficit and debt numbers on television have the fortitude to wage a six-year-long campaign that keeps growth in government spending to below 2 per cent in real terms to achieve a budget surplus by 2015-16?
The answer is obvious. This is Kevin Rudd and Wayne Swan's real problem. Keen to promote themselves as decisive leaders during an economic crisis, this week they looked scared, silly and subservient to political spin. Until sanity prevailed at week's end, Australia had a Prime Minister and Treasurer who refused to answer questions about their core budget numbers with the directness of a primary school student. Their instinct was to avoid putting the words "dollars" and "billions" around the $57.6 billion deficit or projected $188 billion net debt.
This is the point where political spin lost touch with reality. It offers the insight that there are Rudd government tacticians who actually believe this is smart politics. It means, you see, Rudd and Swan weren't delivering a damaging media grab to be recycled. But it also sent another message: that the Rudd Government cannot look Australians in the eye and speak the truth.
What is extraordinary is that this tactic continued into a second week after criticism of Swan for omitting the deficit figure from his budget speech. The evasions this week left the impression of a Government desperate to hide something. The effect was only to reinforce attention on the size of the deficit and debt. The tactic reeks of the corrupted culture of NSW Labor, where spin is used endlessly to try to conceal the economic mire into which Australia's largest state has sunk. This mentality seems embedded in the Rudd Government's culture and it is a potentially terminal disease.
Rudd and Swan are better than this and they need to rise above it: this should become a test of their political character. They don't seem to comprehend the doubts fermenting about their Government in boardrooms across the nation (despite deep gratitude for the fiscal stimulus) and that this behaviour only further undermined their credentials.
And, lastly, we'll finish with a dose of reality, as the scales fall from middle Australia's eyes, and they see St Kevin's hypocrisy for what it is:
Even Kevin Rudd felt compelled to wade in on the matter by calling on all sporting clubs to give women more respect and giving his tacit agreement to the Nine Network's sacking of Matthew Johns.
At the same time there are many in the sporting world who believe that Johns was unfairly treated and who believe the Prime Minister should have stuck to commenting on his budget rather than the morality of larrikin footballers.
This newspaper's House Rules blog echoed the thoughts of many on Rudd's eagerness to put his own moral views on the situation. One blog commentator, "Skipper", wrote: "So the man who reduced a female RAAF member to tears and failed to apologise and made a drunken visit to a strip club is telling others to show respect to women. Curious!"
More to the point was "Oracle", who said: "No law was broken. This is purely a moral issue and if Johns can be sacked based on moral values can we sack Rudd for visiting strip clubs?"
Hear hear!
Have a great weekend.
On Nanny Conroy's broadband plan:
Lindsay Tanner has confirmed what was suspected. In arriving at its estimate that the cost of the revised national fibre-to-the-premises broadband network would cost $43 billion, the Rudd government essentially dreamed up a big number and then added to it.
Committing to spending up to $43 billion of taxpayer funds, perhaps more, perhaps less, without rigorous and detailed analysis and modelling of the economics of the network and its inter-action with existing broadband networks is extraordinary.
When one considers the time and effort Infrastructure Australia put into compiling its list of priority national infrastructure projects, the way the NBN decision was developed – essentially as a response to the failure of the original lengthy tender process that involved only $4.7 billion of taxpayer funds – is even more remarkable.
The evaluation that should have preceded the commitment will now occur, with the government commissioning an "implementation study", which one assumes will consider the complex economic issues involved and come to a conclusion whether the NBN is a viable commercial proposition.
And this:
OECD statistics used to support the government's $43 billion national broadband network also raise serious doubts about the prospects of a fibre-to-the-home project being sustainable without heavy ongoing subsidies...
... The minister has ignored statistics that raise doubts about whether the construction of a fibre network will be economically viable.
Data from other OECD countries with more advanced broadband networks than Australia show that consumers faced with a choice between fibre and high speed broadband over copper (ADSL2+) will not necessarily rush to connect to fibre.
On the Australian Building and Construction Commission:
There was never any real question about whether the ABCC would survive the first term of the Rudd government. Indeed, many industry observers are surprised that it will last to early 2010 given the trenchant union opposition to the organisation and the debt that the political wing owes its industrial brethren for making Work Choices electoral death for the Howard government.
But the pragmatic Gillard would privately know that the ABCC has brought industrial peace to the industry, as the updated 2009 Report on Productivity in the Building and Construction Industry released by the Master Builders Association last week makes abundantly evident.
It says in the executive summary: “All of this evidence supports the conclusion that there has been a significant gain in construction industry productivity. What remains is to identify whether or not the contribution from each source to the productivity gain can be separately isolated.
“The data sources … indicate that the significant productivity gains in construction industry productivity started to appear around 2002-03. This supports the interpretation that it was the activities of the Taskforce, established in October 2002 and, more importantly, the ABCC (given its enforcement powers) when it was established in October 2005 that made a major difference.”
Despite the unions’ claims to the contrary, the industrial peace has come without any undue impact of the industry’s safety record. From 2000-01 to 2005-06, workplace claims per 1000 employees fell from 31 to 25 and preliminary figures for 2006-07 put the figure at 22.
It's working, productivity is up, safety is still good, everyone is happy except the rent seeking bullies in the unions - so let's upset everyone just to please them! Great one St Kev. In another article:
Harder heads in the federal ministry and caucus, however, while privately conceding that the ABCC in its current form cannot survive, are deeply worried about what might happen in Victoria and WA once it has been abolished, and are anxious to ensure its successor can exert its authority over this industry.
They are acutely aware of the capacity of these two branches to cause industrial mayhem as witnessed in Victoria during the lengthy West Gate Bridge dispute.
You betcha! But it's not like they're going to do anything about it, are they, apart from wring their hands.
The stupidity of trying to define an alcopop in legislation, so as to tax it differently to other alcoholic products, hits home at makers of Belgian beers. Memo to Brother Wayne and the excise crew at Treasury - why not tax alcoholic beverages by alcohol content? That would solve all your problems.
Mitch Hooke of the Minerals Council of Australia brings in the heavy artillery, Brian Fisher, to do the analysis of the C"P"RS that Treasury should have done. No surprises in the conclusions:
The CPRS scheme will shed 23,510 jobs in the minerals sector by 2020 and more than 66,000 by 2030. These are direct jobs. All minerals sectors will be affected, whether in coal mining, gold and base metals, alumina refining, mining services, copper, zinc, lead and aluminium smelting and so on. No state, or the Northern Territory, will be spared, no mining region will be untouched. The impact on regional Australia will be severe, including thousands of jobs in the Illawarra and the Hunter in NSW, the Bowen Basin in Queensland, remote regions in Western Australia, including the Pilbara and Kalgoorlie, South Australia, Victoria's Latrobe Valley, Tasmania and the Northern Territory.
You can add to these numbers the jobs of the council workers, the school teachers, the nurses, gardeners, and employees in the hundreds of small businesses in the towns and communities that service these mining regions.
That's just the start, Mitch! Killing the mines will drag the rest of the economy down with it. And what will happen in the suburban shopping malls when the punters can't by plasma screen tellies, because we can't economically mine the minerals to pay for them? Revolution in the streets! Great idea Kev!
Then there's the budget, starting with the attack on employee share ownership schemes:
There are about two million Australian employees who have been gradually building up stakes in the companies where they work via what are called "qualifying" share schemes. They're pretty basic, and they work by getting the employee to buy shares out of pre-tax income, but then hitting them for income tax at the far end when they sell the shares, if they make a profit.
What's gobsmacked a lot of observers is how the Government has instantaneously alienated a big slab of middle Australia, the ordinary scheme participants, while laying itself open to the serious risk that revenue from those schemes was going to go down and not up.
The strangest element of all is that Swan himself has long been a champion of employee share schemes on the basis that they align the interests of the workers with the shareholders.
A lot of thought went into that one, yes? Again, as with private health insurance, the pensions, the C"P"RS, the support for the car industry, etc., St Kevin's ideological fetishes trump common sense and good policy.
Then there's St Kevin's promise to wear the hairshirt - next year, of course, not this year:
Opposition Treasury spokesman Joe Hockey highlighted his scepticism last night by ridiculing Mr Rudd's promise of a limit on growth in outlays, noting it would slap a virtual straitjacket on the Government for six years.
Insisting that no government would go to an election without spending initiatives, Mr Hockey said he did not believe Mr Rudd would stick to the commitment.
"There's no wriggle room for new spending in their assumptions," he told The Australian last night. "They've already broken this promise because they have promised 3 per cent real growth in defence spending a year."
Believe that promise, and you'll believe anything. Especially when it comes from a man who, despite claiming to be a fiscal conservative, and before his conversion to spend-a-thons, increased government spending by 13.5% - yes, that much! - in 2008-09.
Peter Costello warms to this theme:
"What I find extraordinary is (that) if there was all this unsustainable spending, why didn't he (Mr Swan) cut it in the last budget? Apparently last year he didn't think this was unsustainable and made no effort in relation to it at all," Mr Costello said.
"He has invented this in response to the fact that he has careered the budget into deficit."
Since handing down last year's budget, Mr Swan had committed to spend another $100 billion on economic stimulus packages and a national broadband network.
"This bloke has added $100billion to spending and then said it was unsustainable to start with."
Alan Wood, in the Oz, detects the same pattern emerging as RuddWatch has noticed, first here:
The Government is making much of the fact that, on the budget forecasts, almost all new spending will be offset in the final year of the forward estimates, 2012-13, putting it on track for a surplus in 2015-16, but it is hard to believe. The Government certainly sent the wrong signal with its decision to increase pensions in an allegedly tough budget intended to demonstrate its long-term fiscal prudence. Whatever the arguments about the adequacy of pensions, this wasn't the time to put them up.
I don't know what Treasury said to the Prime Minister and Treasurer about pensions in their pre-budget discussions, but I would be willing to bet it didn't support this increase. In fact, I wouldn't be surprised if it warned them that a rise threatened the credibility of their fiscal strategy. Remember, the Government flew a kite about backing off its pension promise in the run-up to the budget.
It rapidly retreated in the face of a hostile response from pensioners. This was politics, not good policy, with Labor safe in the knowledge that on this issue the Opposition was equally irresponsible, so it was free to follow its welfarist instincts...
...[I]n the next couple of years the Rudd Government will need to take much tougher measures to rein in the bloated entitlement spending that is the dark side of the Howard government's legacy than it has shown in this budget, and a much more disciplined and consistent policy approach than we have seen from this Prime Minister.
And then here:
The big threat here has nothing to do with economic growth forecasts. It has everything to do with Rudd's chaotic and unpredictable leadership style and his obsession with political spin. This is a Government that couldn't make the hard spending decisions in its first budget, has managed only a half-hearted effort in its second and is unlikely to do much in its third, an election budget.
It hardly inspires confidence it will turn into a strict fiscal disciplinarian if it wins a second term.
Paul Kelly links this clear and present problem to St Kevin's refusing to say the 'B' word:
This Government's communications problem can be summarised in one question: does anybody believe that a Prime Minister and Treasurer too frightened to announce the deficit and debt numbers on television have the fortitude to wage a six-year-long campaign that keeps growth in government spending to below 2 per cent in real terms to achieve a budget surplus by 2015-16?
The answer is obvious. This is Kevin Rudd and Wayne Swan's real problem. Keen to promote themselves as decisive leaders during an economic crisis, this week they looked scared, silly and subservient to political spin. Until sanity prevailed at week's end, Australia had a Prime Minister and Treasurer who refused to answer questions about their core budget numbers with the directness of a primary school student. Their instinct was to avoid putting the words "dollars" and "billions" around the $57.6 billion deficit or projected $188 billion net debt.
This is the point where political spin lost touch with reality. It offers the insight that there are Rudd government tacticians who actually believe this is smart politics. It means, you see, Rudd and Swan weren't delivering a damaging media grab to be recycled. But it also sent another message: that the Rudd Government cannot look Australians in the eye and speak the truth.
What is extraordinary is that this tactic continued into a second week after criticism of Swan for omitting the deficit figure from his budget speech. The evasions this week left the impression of a Government desperate to hide something. The effect was only to reinforce attention on the size of the deficit and debt. The tactic reeks of the corrupted culture of NSW Labor, where spin is used endlessly to try to conceal the economic mire into which Australia's largest state has sunk. This mentality seems embedded in the Rudd Government's culture and it is a potentially terminal disease.
Rudd and Swan are better than this and they need to rise above it: this should become a test of their political character. They don't seem to comprehend the doubts fermenting about their Government in boardrooms across the nation (despite deep gratitude for the fiscal stimulus) and that this behaviour only further undermined their credentials.
And, lastly, we'll finish with a dose of reality, as the scales fall from middle Australia's eyes, and they see St Kevin's hypocrisy for what it is:
Even Kevin Rudd felt compelled to wade in on the matter by calling on all sporting clubs to give women more respect and giving his tacit agreement to the Nine Network's sacking of Matthew Johns.
At the same time there are many in the sporting world who believe that Johns was unfairly treated and who believe the Prime Minister should have stuck to commenting on his budget rather than the morality of larrikin footballers.
This newspaper's House Rules blog echoed the thoughts of many on Rudd's eagerness to put his own moral views on the situation. One blog commentator, "Skipper", wrote: "So the man who reduced a female RAAF member to tears and failed to apologise and made a drunken visit to a strip club is telling others to show respect to women. Curious!"
More to the point was "Oracle", who said: "No law was broken. This is purely a moral issue and if Johns can be sacked based on moral values can we sack Rudd for visiting strip clubs?"
Hear hear!
Have a great weekend.
Friday, May 22, 2009
'300': absolutely the stupidest most pathetic performance I have ever seen in my life
"But I don't know if I've ever seen anything so awfully, skin-crawlingly, knuckle-bitingly embarrassing as the Prime Minister and Treasurer this week, struggling to avoid voicing the exact dollar figure of Australia's expected degree of public debt in years to come."
That's Annabel Crabb, in the SMH, summing up how a lot of people felt about the performance of St Kevin and Brother Wayne in the wake of the Budget.
I must admit, it made my head spin.
"Embarrassing for us, the audience, who slowly and incredulously come to realise that they are doing this because they actually think we're dumb enough not to pick it up."
Yes, they actually believe that too. They think that no-one will notice.
I don't feel that I can blame Brother Wayne for this. Just as with his avoidance of the words 'deficit' and 'recession', I suspect the orders came from the PM's office.
What it represents is a failure of leadership. What has happened is that somewhere, St Kevin has been advised, or has come to believe, that if you don't say it, then the public won't notice it, because they are so gullible. It is an extraordinarily arrogant approach, one entirely in keeping with his Gaullism. But he doesn't have the wit and the judgment and the modesty to realise that people aren't stupid, and that treating them as sheep would in the end only cause him to look utterly ridiculous.
But really, can we blame St Kevin entirely? Think about it this way:
When he came out with complete and utter rubbish in his Letters to the Philistines, published in The Monthly, his errors and misjudgements were ignored by the press and the populace.
When he said 'I'm an economic conservative', the press and public didn't question him on it, they simply took him at his word.
When it came out that he had entirely made up the story about his family's eviction at the hands of Aubrey Low, the public didn't punish him.
When it came out that he hadn't been entirely truthful about his relationship and dealings with Brian Burke, the press let him off the hook entirely, and his popularity was unaffected.
When it was revealed that he'd gotten blind drunk in a strip club in the US, his weak as water explanation that he 'couldn't remember anything because I was too drunk' was accepted unquestioningly by the press gallery, and his popularity actually increased. People just gave him a free pass.
When he played games like 'avoid the R and D words', the press just chuckled knowingly, and again gave him the free pass.
When it was revealed that he had reduced a lady flight attendant to tears with his outrageous behaviour, there was hardly a peep in the media, including from all the self-appointed cultural dieticians and so-called feminists.
And now he's tried to get away with easily his greatest ever fraud: inflicting an appalling budget, full of increased spending and buggerall by way of expenditure restraint (that's going to come later, apparently), and backed up by forecasts that are nothing less than seriously dodgy, and the press gallery again gives him a free pass - although the population appears to have wised up somewhat.
Now with that track record, wouldn't you think it reasonable that Rudd, who already starts with an inflated opinion of himself, would hold the public in such contempt as to think that he could get away with simply using the number '300' to explain the budget deficit? It's a reasonable assumption for a person such as Rudd, I would have thought.
So we shouldn't be surprised with this week's antics. It's exactly the sort of thing that the Australian people, and especially the clowns in the media, have not only been turning a blind eye to it, but have rewarded him with sky-high approval ratings and even the keys to the Lodge.
* * * * *
The reason why I set up this blog is because, from the start, from the first Sermon to the Philistines, I could see that Rudd was a phoney and a fraud. I wanted to make sure that he didn't get away scot-free with his outrageous misrepresentations, and I wanted the public to know just what sort of man he was, and still is.
I haven't been very successful in this. I am very fond of all my audience, but there aren't many of you. And I certainly haven't had an impact on the political landscape, let alone St Kevin himself. But everything I have said is all here, all my judgements of St Kevin's behaviour, in public, for all to see and judge. Have a look at all the entries in the 'Rudd Rubbish' category.
And, finally, it looks as though St Kevin, with his '300' stunt, has finally jumped the shark. The public gave him plenty of rope, and he has now hanged himself with it. His credibility has taken a tremendous blow in the last couple of weeks.
RuddWatch is actually quite fond of 'Dirty Harry' quotes. One, which my father was quite fond of, and ingrained in me, was his signing off line in Magnum Force: 'A man's got to know his limitations'. St Kevin has no idea of his 'limitations'.
Expect more tantrums.
* * * * *
I didn't feel a need to set up such a blog about Kim Beazley, or Simon Crean. Those two men were entirely decent, and entirely sincere. The 'spin' that they employed was, to my mind, of a more innocent kind, a way of focussing public discussion and capturing people's attention, rather than concealing what ought to be known to the public and manipulating opinion. And there was nothing questionable about them personally. They had a full grasp on reality, even if their judgement was occasionally awry.
Nor was there a need to do so when Mark Latham was Labor leader. From the very first press conference, when he acted out people climbing the so called 'ladder of opportunity', it was clear that. like Paul Keating, this bloke wouldn't last, and that the public would need no assistance in seeing through him. My judgement, as it turned out, was correct.
But it was different with Rudd. I judged that this bloke was not 'on the level', that he had no compunction about saying whatever it was he had to say in order to win that day's headline, no matter the truthfulness or otherwise of his claims. And that this was dangerous for Australia, because, as the public's flirtation with Latham showed, they wanted something different from Howard, and Rudd had timed his run perfectly.
This year's awful budget, and the more awful ones to come in the next few years, have borne out my concerns.
* * * * *
I want to leave you with a contrast, to demonstrate clearly just how far our public leadership has fallen.
Here are some extracts from a speech which BHP Chairman Don Argus gave this week in Brisbane. I strongly recommend that you read the speech.
There have been some unorthodox government and regulator responses to the report and some progress in stabilising financial markets.These measures have not yet restored confidence. Nor have they arrested the negative relationship between weakening national economic activity and intense business financial strain – particularly in the United States, the United Kingdom and Europe.
The IMF report and others make it easy to conclude that the road to economic recovery will be slow. Hence – my cautious response to recent political rhetoric. There is also enough evidence to show that recessions that follow a financial crisis are usually severe. This time we are living through a global recession that coincides with a financial crisis that emanates from developed economies that were once powerhouses of the world economy, particularly the United States. I believe the evidence suggests this is a recipe for a long global recession and a protracted recovery.
I believe a real concern in troubled economic times, is that anxiety about the economy will encourage protectionist, paternalistic policies by some governments. There is already some evidence of that. I have no problem with governments developing strategies and standards that encourage business initiatives and behaviour that is the interest of shareholders and community alike. It becomes a question of balance. Economic recovery will not come from sustained government intervention in business and direct management of financial services and credit creation. It will come from the correct balance of comprehensive and carefully applied regulation to independent businesses working to well conceived, transparent and efficiently executed strategies.
The 17 years of continuous economic growth we had prior to the current downturn was largely fuelled by mining developments and exports. To underpin future growth, it has been estimated that Australia will need to finance A$210 billion of large-scale long term capital projects over the next five years. It will also need to refinance up to A$108 billion of debt in the next two years. The weakened condition of global capital markets makes that challenging.
This is leadership. This is clear eyed analysis. This is an honest facing of difficult facts. This is respect for the intellectual and moral capacity of one's audience.
Now, here is an extract from St Kevin's appearance on Lateline:
TONY JONES: OK. Let's move on. What's the peak figure of the projected public debt in terms of tens or hundreds of billions of dollars in the coming years? What's the peak figure?
KEVIN RUDD: Well, these are clearly outlined in the Budget papers and they're usually expressed in terms of a percentage of GDP. We peak, in around about 2013, at about 13.8 per cent of GDP.
TONY JONES: How much of that is in tens of billions or hundreds of billions of dollars; how much is that?
KEVIN RUDD: Well, let me step back in terms of the elements of this. First of all, 70 per cent of our overall position here is determined by a $214-billion collapse in tax revenue. That's one slice of it.
TONY JONES: OK. I understand - we understand that. So what is the figure of peak debt in hundreds of billions of dollars? What is the actual figure?
KEVIN RUDD: Well, Tony, I'm about to come to that when I go to constituent parts. About $214-billion comes from a collapse in tax revenue and that is happening right across all the advanced economies across the world. That's about two thirds of it. Then you go to the remaining third of it, which is made up of what we're investing in infrastructure and other forms of temporary stimulus. And of that remaining one third of our total borrowings, the largest proportion is made up through infrastructure investment and the smallest proportion is made up through other forms of temporary stimulus. Put that altogether...
TONY JONES: But all I'm asking for is one figure.
KEVIN RUDD: Well, I'm about to come to that, Tony. I'm taking you to the constituent parts. Put all that together and you'll see clearly outlined in the Budge papers, that we're aiming to a gross figure of 13.8, which comes out at about $300-billion). The Liberals have said about $275-billion and then they've failed to nominate or to support $22-billion of savings in the Budget, which makes our positions virtually identical. That's the point I was making.
TONY JONES: That figure is $300-billion, is that right?
KEVIN RUDD: As I said before, 13.8 per cent of GDP as described accurately in the Budget papers. There's nothing new about that.
TONY JONES: Is there a political spin rule which says the Prime Minister must not say that figure? Because it seems very hard to get you to say $300-billion.
KEVIN RUDD: Well, Tony, there seems to be a political spin rule on your part to go back to this time and time again. The Treasurer made this absolutely plain in the Budget papers. I said before the figure was $300 (billion) as the Liberals' was $275 (billion). Add $22-billion of non supportive savings, they come to a similar figure. The key thing, though, is this - let me just add this point. This comes to some 13.8 per cent of GDP by the time it reaches its peak at around by 2313, 2014, and then comes down to something like 3 per cent of GDP across the decade.
The point I wish to make is this: this is the lowest net debt of any of the major advanced economies. Secondly, it is lower by the factor of seven, that is it is seven times lower than the average net debt of the major advanced economies. And finally, Standard And Poor's international ratings agency, when they evaluated our budget, not only reaffirmed the Government's triple-A rating, credit rating for Australian sovereign debt, but on top of that, indicated in its statement that Australia's public finances were in sound working order. This needs to be put into absolute context, therefore, against the dishonest debt and deficit fear campaign being mounted by the Liberals.
This is not leadership. This is disrespect and contempt for the intellectual and moral capacity of one's audience. This is dodging of difficult facts. This is evidence of being divorced from reality. This is an ego out of control. This is irresponsible. This is pathetic.
That's Annabel Crabb, in the SMH, summing up how a lot of people felt about the performance of St Kevin and Brother Wayne in the wake of the Budget.
I must admit, it made my head spin.
"Embarrassing for us, the audience, who slowly and incredulously come to realise that they are doing this because they actually think we're dumb enough not to pick it up."
Yes, they actually believe that too. They think that no-one will notice.
I don't feel that I can blame Brother Wayne for this. Just as with his avoidance of the words 'deficit' and 'recession', I suspect the orders came from the PM's office.
What it represents is a failure of leadership. What has happened is that somewhere, St Kevin has been advised, or has come to believe, that if you don't say it, then the public won't notice it, because they are so gullible. It is an extraordinarily arrogant approach, one entirely in keeping with his Gaullism. But he doesn't have the wit and the judgment and the modesty to realise that people aren't stupid, and that treating them as sheep would in the end only cause him to look utterly ridiculous.
But really, can we blame St Kevin entirely? Think about it this way:
When he came out with complete and utter rubbish in his Letters to the Philistines, published in The Monthly, his errors and misjudgements were ignored by the press and the populace.
When he said 'I'm an economic conservative', the press and public didn't question him on it, they simply took him at his word.
When it came out that he had entirely made up the story about his family's eviction at the hands of Aubrey Low, the public didn't punish him.
When it came out that he hadn't been entirely truthful about his relationship and dealings with Brian Burke, the press let him off the hook entirely, and his popularity was unaffected.
When it was revealed that he'd gotten blind drunk in a strip club in the US, his weak as water explanation that he 'couldn't remember anything because I was too drunk' was accepted unquestioningly by the press gallery, and his popularity actually increased. People just gave him a free pass.
When he played games like 'avoid the R and D words', the press just chuckled knowingly, and again gave him the free pass.
When it was revealed that he had reduced a lady flight attendant to tears with his outrageous behaviour, there was hardly a peep in the media, including from all the self-appointed cultural dieticians and so-called feminists.
And now he's tried to get away with easily his greatest ever fraud: inflicting an appalling budget, full of increased spending and buggerall by way of expenditure restraint (that's going to come later, apparently), and backed up by forecasts that are nothing less than seriously dodgy, and the press gallery again gives him a free pass - although the population appears to have wised up somewhat.
Now with that track record, wouldn't you think it reasonable that Rudd, who already starts with an inflated opinion of himself, would hold the public in such contempt as to think that he could get away with simply using the number '300' to explain the budget deficit? It's a reasonable assumption for a person such as Rudd, I would have thought.
So we shouldn't be surprised with this week's antics. It's exactly the sort of thing that the Australian people, and especially the clowns in the media, have not only been turning a blind eye to it, but have rewarded him with sky-high approval ratings and even the keys to the Lodge.
* * * * *
The reason why I set up this blog is because, from the start, from the first Sermon to the Philistines, I could see that Rudd was a phoney and a fraud. I wanted to make sure that he didn't get away scot-free with his outrageous misrepresentations, and I wanted the public to know just what sort of man he was, and still is.
I haven't been very successful in this. I am very fond of all my audience, but there aren't many of you. And I certainly haven't had an impact on the political landscape, let alone St Kevin himself. But everything I have said is all here, all my judgements of St Kevin's behaviour, in public, for all to see and judge. Have a look at all the entries in the 'Rudd Rubbish' category.
And, finally, it looks as though St Kevin, with his '300' stunt, has finally jumped the shark. The public gave him plenty of rope, and he has now hanged himself with it. His credibility has taken a tremendous blow in the last couple of weeks.
RuddWatch is actually quite fond of 'Dirty Harry' quotes. One, which my father was quite fond of, and ingrained in me, was his signing off line in Magnum Force: 'A man's got to know his limitations'. St Kevin has no idea of his 'limitations'.
Expect more tantrums.
* * * * *
I didn't feel a need to set up such a blog about Kim Beazley, or Simon Crean. Those two men were entirely decent, and entirely sincere. The 'spin' that they employed was, to my mind, of a more innocent kind, a way of focussing public discussion and capturing people's attention, rather than concealing what ought to be known to the public and manipulating opinion. And there was nothing questionable about them personally. They had a full grasp on reality, even if their judgement was occasionally awry.
Nor was there a need to do so when Mark Latham was Labor leader. From the very first press conference, when he acted out people climbing the so called 'ladder of opportunity', it was clear that. like Paul Keating, this bloke wouldn't last, and that the public would need no assistance in seeing through him. My judgement, as it turned out, was correct.
But it was different with Rudd. I judged that this bloke was not 'on the level', that he had no compunction about saying whatever it was he had to say in order to win that day's headline, no matter the truthfulness or otherwise of his claims. And that this was dangerous for Australia, because, as the public's flirtation with Latham showed, they wanted something different from Howard, and Rudd had timed his run perfectly.
This year's awful budget, and the more awful ones to come in the next few years, have borne out my concerns.
* * * * *
I want to leave you with a contrast, to demonstrate clearly just how far our public leadership has fallen.
Here are some extracts from a speech which BHP Chairman Don Argus gave this week in Brisbane. I strongly recommend that you read the speech.
There have been some unorthodox government and regulator responses to the report and some progress in stabilising financial markets.These measures have not yet restored confidence. Nor have they arrested the negative relationship between weakening national economic activity and intense business financial strain – particularly in the United States, the United Kingdom and Europe.
The IMF report and others make it easy to conclude that the road to economic recovery will be slow. Hence – my cautious response to recent political rhetoric. There is also enough evidence to show that recessions that follow a financial crisis are usually severe. This time we are living through a global recession that coincides with a financial crisis that emanates from developed economies that were once powerhouses of the world economy, particularly the United States. I believe the evidence suggests this is a recipe for a long global recession and a protracted recovery.
I believe a real concern in troubled economic times, is that anxiety about the economy will encourage protectionist, paternalistic policies by some governments. There is already some evidence of that. I have no problem with governments developing strategies and standards that encourage business initiatives and behaviour that is the interest of shareholders and community alike. It becomes a question of balance. Economic recovery will not come from sustained government intervention in business and direct management of financial services and credit creation. It will come from the correct balance of comprehensive and carefully applied regulation to independent businesses working to well conceived, transparent and efficiently executed strategies.
The 17 years of continuous economic growth we had prior to the current downturn was largely fuelled by mining developments and exports. To underpin future growth, it has been estimated that Australia will need to finance A$210 billion of large-scale long term capital projects over the next five years. It will also need to refinance up to A$108 billion of debt in the next two years. The weakened condition of global capital markets makes that challenging.
This is leadership. This is clear eyed analysis. This is an honest facing of difficult facts. This is respect for the intellectual and moral capacity of one's audience.
Now, here is an extract from St Kevin's appearance on Lateline:
TONY JONES: OK. Let's move on. What's the peak figure of the projected public debt in terms of tens or hundreds of billions of dollars in the coming years? What's the peak figure?
KEVIN RUDD: Well, these are clearly outlined in the Budget papers and they're usually expressed in terms of a percentage of GDP. We peak, in around about 2013, at about 13.8 per cent of GDP.
TONY JONES: How much of that is in tens of billions or hundreds of billions of dollars; how much is that?
KEVIN RUDD: Well, let me step back in terms of the elements of this. First of all, 70 per cent of our overall position here is determined by a $214-billion collapse in tax revenue. That's one slice of it.
TONY JONES: OK. I understand - we understand that. So what is the figure of peak debt in hundreds of billions of dollars? What is the actual figure?
KEVIN RUDD: Well, Tony, I'm about to come to that when I go to constituent parts. About $214-billion comes from a collapse in tax revenue and that is happening right across all the advanced economies across the world. That's about two thirds of it. Then you go to the remaining third of it, which is made up of what we're investing in infrastructure and other forms of temporary stimulus. And of that remaining one third of our total borrowings, the largest proportion is made up through infrastructure investment and the smallest proportion is made up through other forms of temporary stimulus. Put that altogether...
TONY JONES: But all I'm asking for is one figure.
KEVIN RUDD: Well, I'm about to come to that, Tony. I'm taking you to the constituent parts. Put all that together and you'll see clearly outlined in the Budge papers, that we're aiming to a gross figure of 13.8, which comes out at about $300-billion). The Liberals have said about $275-billion and then they've failed to nominate or to support $22-billion of savings in the Budget, which makes our positions virtually identical. That's the point I was making.
TONY JONES: That figure is $300-billion, is that right?
KEVIN RUDD: As I said before, 13.8 per cent of GDP as described accurately in the Budget papers. There's nothing new about that.
TONY JONES: Is there a political spin rule which says the Prime Minister must not say that figure? Because it seems very hard to get you to say $300-billion.
KEVIN RUDD: Well, Tony, there seems to be a political spin rule on your part to go back to this time and time again. The Treasurer made this absolutely plain in the Budget papers. I said before the figure was $300 (billion) as the Liberals' was $275 (billion). Add $22-billion of non supportive savings, they come to a similar figure. The key thing, though, is this - let me just add this point. This comes to some 13.8 per cent of GDP by the time it reaches its peak at around by 2313, 2014, and then comes down to something like 3 per cent of GDP across the decade.
The point I wish to make is this: this is the lowest net debt of any of the major advanced economies. Secondly, it is lower by the factor of seven, that is it is seven times lower than the average net debt of the major advanced economies. And finally, Standard And Poor's international ratings agency, when they evaluated our budget, not only reaffirmed the Government's triple-A rating, credit rating for Australian sovereign debt, but on top of that, indicated in its statement that Australia's public finances were in sound working order. This needs to be put into absolute context, therefore, against the dishonest debt and deficit fear campaign being mounted by the Liberals.
This is not leadership. This is disrespect and contempt for the intellectual and moral capacity of one's audience. This is dodging of difficult facts. This is evidence of being divorced from reality. This is an ego out of control. This is irresponsible. This is pathetic.
Sunday, May 17, 2009
Budget: St Kevin channels St Gough
Stephen Kirchner says it better than I could: St Kevin, that so called 'economic conservative', has morphed into Gough Whitlam:
THE 2009 budget forecasts the biggest expansion in federal government spending since Gough Whitlam. While the budget deficit is being sold as a necessary response to the worst global economic downturn since the Depression, government spending will hinder growth long after Australia's recession is over.
The Government has made much of the reduction in revenue flowing from the global downturn and the resulting domestic recession. But this is only one side of the budget deficit equation. The unprecedented deterioration in the budget balance is also driven by the biggest increase in government spending in a generation.
The federal government spending share of gross domestic product will increase by 2.6 percentage points this financial year, with a further increase of two percentage points forecast for next financial year, the biggest increases since the early 1970s. Government spending will reach 28.6per cent of GDP in 2009-10, a figure unprecedented in peacetime.
It is appropriate that the Government should allow the automatic stabilisers to work in response to an economic downturn.
However, the deterioration in the budget balance has been made worse by discretionary fiscal stimulus packages of doubtful effectiveness.
There is little reason to believe that these discretionary policy decisions have been effective in supporting economic growth. Even Treasury concedes "it is not possible to measure precisely the actual impact of the economic security strategy".
It should be recalled that Australia also has seen an unprecedented easing in monetary policy, which has made a much more timely and significant contribution to supporting economic growth than the stimulus packages.
Monetary policy can be tightened again when recovery begins, but the legacy of the Government's fiscal stimulus packages will be with us for much longer.
While the Government talks up the short-term stimulus effects of government spending, it neglects to mention the crowding out of private investment by government borrowing that will occur long after the recession is over.
In the US, the Congressional Budget Office has recognised that these crowding-out effects will see fiscal stimulus measures subtract from economic growth in the long run.
Most of the effect of the Government's infrastructure spending will not be seen until the recovery is well under way. Even then, the economic benefits of some of these projects may turn out to be less than the opportunity cost of the resources they consume, leaving Australians worse off.
The danger is that the Government's fiscal stimulus measures simply divert resources from one sector of the economy to another, rather than bringing unemployed labour and capital back into employment.
The Government says it will keep real growth in government spending capped at 2 per cent a year in the future, but no government in recent history has shown this degree of expenditure restraint.
Real growth in spending averaged 4per cent between 1971-72 and 2007-08, which excludes the Government's recent stimulus packages. [RuddWatch: note that St Kevin hasn't said exactly how he is going to achieve this restraint in spending - my bet is that he doesn't know and that, like everything else he does, the claim is purely for placating current concerns over his credit card binge]
Government spending has increased 13.5per cent this financial year, an increase unprecedented since the Whitlam era, and it will increase by a further 3.9 per cent in 2009-10.
There is a large body of literature demonstrating that the size of government matters for long-run economic growth. Economist Gerald Scully estimated the optimal tax share of GDP for all levels of government in the US at 23 per cent. Above that level, the size of government begins to subtract from, rather than contribute to, economic growth. The welfare costs of big government are enormous. Scully estimated the US had lost $4 of national income for every $1 in tax beyond the optimal level of taxation.
The Australian economy is structurally similar to that of the US, so it would seem unlikely that our optimal tax share is significantly larger than that of the US. The tax share of GDP for all levels of government in Australia is already 30.8 per cent.
The Government is forecasting a return to surplus in the medium term, but these forecasts are well and truly overshadowed by the elephant in the room: the huge long-term fiscal deficits projected in the previous government's 2007 intergenerational report. That report projected net debt to rise to 30 per cent of GDP by 2046-47, with further increases expected beyond the Treasury's 40-year projection period. Treasury indicated that the expected path for net debt was unsustainable in the absence of key policy changes.
The government spending share of GDP was expected to rise by 4.75per cent during the same period.
The next intergenerational report, prepared by the Rudd Government, will proceed from a worse starting point. Although this will be offset to some extent by saving measures announced in the budget, it is likely the report will again show that the federal Government's finances are not on a sustainable long-term footing in the absence of significant policy changes.
The projected fiscal gap and the associated growth in government spending points to unsustainable growth in commonwealth debt. This situation can be resolved only through some combination of higher taxes or reduced spending.
Most Australians would not want to go down the higher tax route. Yet neither side of politics has shown much appetite for the required expenditure reforms. The unsettling conclusion is that Australia is on the path to a permanent expansion in the size of government that will lower living standards for future generations.
THE 2009 budget forecasts the biggest expansion in federal government spending since Gough Whitlam. While the budget deficit is being sold as a necessary response to the worst global economic downturn since the Depression, government spending will hinder growth long after Australia's recession is over.
The Government has made much of the reduction in revenue flowing from the global downturn and the resulting domestic recession. But this is only one side of the budget deficit equation. The unprecedented deterioration in the budget balance is also driven by the biggest increase in government spending in a generation.
The federal government spending share of gross domestic product will increase by 2.6 percentage points this financial year, with a further increase of two percentage points forecast for next financial year, the biggest increases since the early 1970s. Government spending will reach 28.6per cent of GDP in 2009-10, a figure unprecedented in peacetime.
It is appropriate that the Government should allow the automatic stabilisers to work in response to an economic downturn.
However, the deterioration in the budget balance has been made worse by discretionary fiscal stimulus packages of doubtful effectiveness.
There is little reason to believe that these discretionary policy decisions have been effective in supporting economic growth. Even Treasury concedes "it is not possible to measure precisely the actual impact of the economic security strategy".
It should be recalled that Australia also has seen an unprecedented easing in monetary policy, which has made a much more timely and significant contribution to supporting economic growth than the stimulus packages.
Monetary policy can be tightened again when recovery begins, but the legacy of the Government's fiscal stimulus packages will be with us for much longer.
While the Government talks up the short-term stimulus effects of government spending, it neglects to mention the crowding out of private investment by government borrowing that will occur long after the recession is over.
In the US, the Congressional Budget Office has recognised that these crowding-out effects will see fiscal stimulus measures subtract from economic growth in the long run.
Most of the effect of the Government's infrastructure spending will not be seen until the recovery is well under way. Even then, the economic benefits of some of these projects may turn out to be less than the opportunity cost of the resources they consume, leaving Australians worse off.
The danger is that the Government's fiscal stimulus measures simply divert resources from one sector of the economy to another, rather than bringing unemployed labour and capital back into employment.
The Government says it will keep real growth in government spending capped at 2 per cent a year in the future, but no government in recent history has shown this degree of expenditure restraint.
Real growth in spending averaged 4per cent between 1971-72 and 2007-08, which excludes the Government's recent stimulus packages. [RuddWatch: note that St Kevin hasn't said exactly how he is going to achieve this restraint in spending - my bet is that he doesn't know and that, like everything else he does, the claim is purely for placating current concerns over his credit card binge]
Government spending has increased 13.5per cent this financial year, an increase unprecedented since the Whitlam era, and it will increase by a further 3.9 per cent in 2009-10.
There is a large body of literature demonstrating that the size of government matters for long-run economic growth. Economist Gerald Scully estimated the optimal tax share of GDP for all levels of government in the US at 23 per cent. Above that level, the size of government begins to subtract from, rather than contribute to, economic growth. The welfare costs of big government are enormous. Scully estimated the US had lost $4 of national income for every $1 in tax beyond the optimal level of taxation.
The Australian economy is structurally similar to that of the US, so it would seem unlikely that our optimal tax share is significantly larger than that of the US. The tax share of GDP for all levels of government in Australia is already 30.8 per cent.
The Government is forecasting a return to surplus in the medium term, but these forecasts are well and truly overshadowed by the elephant in the room: the huge long-term fiscal deficits projected in the previous government's 2007 intergenerational report. That report projected net debt to rise to 30 per cent of GDP by 2046-47, with further increases expected beyond the Treasury's 40-year projection period. Treasury indicated that the expected path for net debt was unsustainable in the absence of key policy changes.
The government spending share of GDP was expected to rise by 4.75per cent during the same period.
The next intergenerational report, prepared by the Rudd Government, will proceed from a worse starting point. Although this will be offset to some extent by saving measures announced in the budget, it is likely the report will again show that the federal Government's finances are not on a sustainable long-term footing in the absence of significant policy changes.
The projected fiscal gap and the associated growth in government spending points to unsustainable growth in commonwealth debt. This situation can be resolved only through some combination of higher taxes or reduced spending.
Most Australians would not want to go down the higher tax route. Yet neither side of politics has shown much appetite for the required expenditure reforms. The unsettling conclusion is that Australia is on the path to a permanent expansion in the size of government that will lower living standards for future generations.
Off-topic: Stuart Littlemore, the original 'Watcher'
This is a rather tangential posting, but I think this is important and I want to have my say. And I can't do so anywhere else.
Quadrant, through a link to Australian Conservative, has noticed that the ABC's retrospective of its Media Watch program failed to include footage of the now classic Lateline interview on 11 November, 1997, in which then Media Watch host Stuart Littlemore appears with US journalist Steve Brill, Jennifer Byrne in the compere's seat, and a rather dishy Pilita Clark.
Littlemore has been criticised for being pompous and arrogant, and his appearance here was heralded as his downfall.
But I invite you to watch the clip without prejudice, and listen to what Littlemore says. For mine, the only misdemeanour I can accuse him of is to have lost his temper.
At the beginning of the clip, you can see that Littlemore wants to be constructive, and responds to provocation by pointing out the shortcomings in his interlocutors' thinking. I actually find him quite reasonable: even when asked whether he or his staff have made any mistakes, he doesn't say 'no we haven't', but rather 'none that I am aware of, and none have been brought to our attention'.
Littlemore's critics leapt onto his assertion towards the end of the program, that he worked for free. In fact, Littlemore did receive a salary. But I would invite you to compare the salary that he received for his Media Watch work, which was likely to be rather small, to how much he could have earned by devoting his Media Watch time to his barrister's practice - as a QC, he would have been entitled to many, many times more the money per hour that he earned on Media Watch. Stuart, you weren't working at the ABC for free - it was actually costing you money! But this just emphasises the fact that money was not Littlemore's motivation - he genuinely wanted to raise standards in the media.
Around a month after this episode, and after Littlemore had announced that he was going to retire from the show, I was working in a summer job as a 'gopher' in a barristers' chambers in Sydney. Littlemore's chambers were in the same building, on another floor. I once caught a lift down to the ground floor with him. He was very tall and stood with a stoop - actually I was surprised how old he appeared. I wanted to say 'Mr Littlemore, thankyou for your show', but being a nervous young man, and possibly intimidated by his character, I stayed stumm.
So, let me now say: Mr Littlemore, thanks for the show. I appreciate what you were trying to do. You inspired this blog. I can only hope that I have the same positive impact on someone 'out there' that you had on me.
And I'll try not to lose my temper :-)
Quadrant, through a link to Australian Conservative, has noticed that the ABC's retrospective of its Media Watch program failed to include footage of the now classic Lateline interview on 11 November, 1997, in which then Media Watch host Stuart Littlemore appears with US journalist Steve Brill, Jennifer Byrne in the compere's seat, and a rather dishy Pilita Clark.
Littlemore has been criticised for being pompous and arrogant, and his appearance here was heralded as his downfall.
But I invite you to watch the clip without prejudice, and listen to what Littlemore says. For mine, the only misdemeanour I can accuse him of is to have lost his temper.
At the beginning of the clip, you can see that Littlemore wants to be constructive, and responds to provocation by pointing out the shortcomings in his interlocutors' thinking. I actually find him quite reasonable: even when asked whether he or his staff have made any mistakes, he doesn't say 'no we haven't', but rather 'none that I am aware of, and none have been brought to our attention'.
Littlemore's critics leapt onto his assertion towards the end of the program, that he worked for free. In fact, Littlemore did receive a salary. But I would invite you to compare the salary that he received for his Media Watch work, which was likely to be rather small, to how much he could have earned by devoting his Media Watch time to his barrister's practice - as a QC, he would have been entitled to many, many times more the money per hour that he earned on Media Watch. Stuart, you weren't working at the ABC for free - it was actually costing you money! But this just emphasises the fact that money was not Littlemore's motivation - he genuinely wanted to raise standards in the media.
Around a month after this episode, and after Littlemore had announced that he was going to retire from the show, I was working in a summer job as a 'gopher' in a barristers' chambers in Sydney. Littlemore's chambers were in the same building, on another floor. I once caught a lift down to the ground floor with him. He was very tall and stood with a stoop - actually I was surprised how old he appeared. I wanted to say 'Mr Littlemore, thankyou for your show', but being a nervous young man, and possibly intimidated by his character, I stayed stumm.
So, let me now say: Mr Littlemore, thanks for the show. I appreciate what you were trying to do. You inspired this blog. I can only hope that I have the same positive impact on someone 'out there' that you had on me.
And I'll try not to lose my temper :-)
Saturday, May 16, 2009
Il n'est pas 'un homme serieux'
This year's budget has been a revelation.
That our Prime Minister is not a serious person.
If ever there was a budget in which tough decisions had to be made, and could most easily be made, this was it. Ours is a nation heavily dependent on foreign savings, and last year's financial crisis has caused the people who own those savings to re-think how they allocate them - and especially their allocations to profligate societies.
At the same time, the budget is scheduled to go heavily into deficit for the foreseeable future. Forget Treasury's forecasts of a strong rebound after two years of very weak economic performance. We are entering a period of debt deflation, similar to that experienced by Japan after its financial bubble burst in the early nineties, and economies don't grow very quickly during these times - the only thing that grows robustly in this environment is government debt. And if you believe St Kevin's promise to limit real government expenditure growth to 2% per year for the next X years - well, there's a nice bridge in Sydney I'd like to sell you.
The government has taken no tough decisions, that I can see. Even the increase in the age at which people become eligible for the pension is to occur over a 15 year period! St Kevin and Brother Wayne will (hopefully) be long gone by then.
The government appears to have framed the budget free from any understanding of the reality of economic and financial conditions facing Australia, and the world. I cannot emphasis enough to you how grim the outlook is. The sizes of economies of the US, Europe, Japan and the UK have likely shrunk by 10% in the last six months. Ten per cent! It's almost unbelievable. On top of that, you have the loss of wealth from the deterioration of housing markets around the world, and the collapse of stock markets. The world is a lot poorer than it was. Finally, after the disgraceful and inept behaviour of the financial classes, the savings-heavy countries no longer trust the savings-short countries with their money. In short, money is about to become very hard to come by, for a country as profligate as Australia. The only thing sustaining our national income at the moment is the fact that the contracts governing prices for our resources exports are yet to expire. But they will.
In the face of this, the government has continued increasing spending, made a few cuts here and there, more out of political considerations than consideration for the efficiency of the economy, made hardly any new savings, and decided to place the difference on the national credit card. Moreover, it has told us that it expects everything to be fine in the future.
St Kevin, Brother Wayne, Sister Julia with her fantasies about re-regulating the workforce, even gorgeous Penny with her ideas of 'carbon pollution' - none of them are taking their jobs or the world seriously.
Instead, St Kevin places priority on receiving a hot meal on all his flights ('No %$#&**# lamb!') and presenting Taliban observers with a blow-dry while meeting our courageous soldiers behind the front lines in Afghanistan.
RuddWatch's suspicion is that this is an election budget. St Kevin couldn't be too hard in this budget, despite the overwhelming need for tough decisions and facts to be faced, because he intends to call an early election - before the next budget at least.
That would probably be a wise thing to do, because I suspect the next budget is going to be a shocker.
You may have heard of the term Ricardian equivalence. I suggest that you put it into practice by banking what one of RuddWatch's delightful colleagues called her 'Kev Dudd cheque' into your savings account, and leaving it there for a year. You'll need it next year, when Brother Wayne passes the plate around to fill the enormous hole that he and St Kevin have torn in the nation's fiscal fabric.
In any case, Kev's fiscal stimulus plans aren't going according to plan, if this report is to be believed.
But since September, the market has bounced back, creating a huge, unfulfilled demand for the televisions.
"A week before the stimulus package came out, it went absolutely crazy," Mr Kerr said.
Since September shops have been besieged by buyers and retailers are still working through a backlog of orders. "We couldn't get our hands on enough stock," Mr Kerr said.
Plasma screen tellies aren't made in Australia, and imports don't contribute to domestic income and employment. Congratulations - your taxes, earned by the sweat of your brow, just paid for someone else's luxuries!
The boost to the first home owners' grant isn't exactly going to work, either. What it is doing is pulling forward a whole chunk of demand, as guileless newbies rush in to grab the tax cash before the offer expires. This just means that, when the payments do cease, there will be a rather large hole in the home-buying market, down which home prices will fall - just as the recession is getting started. St Kevin's Treasury advisers would have told him this, I suspect - but who listens to the neo-liberals any more??
Thank God for St Kevin, patron saint of social engineering!
That our Prime Minister is not a serious person.
If ever there was a budget in which tough decisions had to be made, and could most easily be made, this was it. Ours is a nation heavily dependent on foreign savings, and last year's financial crisis has caused the people who own those savings to re-think how they allocate them - and especially their allocations to profligate societies.
At the same time, the budget is scheduled to go heavily into deficit for the foreseeable future. Forget Treasury's forecasts of a strong rebound after two years of very weak economic performance. We are entering a period of debt deflation, similar to that experienced by Japan after its financial bubble burst in the early nineties, and economies don't grow very quickly during these times - the only thing that grows robustly in this environment is government debt. And if you believe St Kevin's promise to limit real government expenditure growth to 2% per year for the next X years - well, there's a nice bridge in Sydney I'd like to sell you.
The government has taken no tough decisions, that I can see. Even the increase in the age at which people become eligible for the pension is to occur over a 15 year period! St Kevin and Brother Wayne will (hopefully) be long gone by then.
The government appears to have framed the budget free from any understanding of the reality of economic and financial conditions facing Australia, and the world. I cannot emphasis enough to you how grim the outlook is. The sizes of economies of the US, Europe, Japan and the UK have likely shrunk by 10% in the last six months. Ten per cent! It's almost unbelievable. On top of that, you have the loss of wealth from the deterioration of housing markets around the world, and the collapse of stock markets. The world is a lot poorer than it was. Finally, after the disgraceful and inept behaviour of the financial classes, the savings-heavy countries no longer trust the savings-short countries with their money. In short, money is about to become very hard to come by, for a country as profligate as Australia. The only thing sustaining our national income at the moment is the fact that the contracts governing prices for our resources exports are yet to expire. But they will.
In the face of this, the government has continued increasing spending, made a few cuts here and there, more out of political considerations than consideration for the efficiency of the economy, made hardly any new savings, and decided to place the difference on the national credit card. Moreover, it has told us that it expects everything to be fine in the future.
St Kevin, Brother Wayne, Sister Julia with her fantasies about re-regulating the workforce, even gorgeous Penny with her ideas of 'carbon pollution' - none of them are taking their jobs or the world seriously.
Instead, St Kevin places priority on receiving a hot meal on all his flights ('No %$#&**# lamb!') and presenting Taliban observers with a blow-dry while meeting our courageous soldiers behind the front lines in Afghanistan.
RuddWatch's suspicion is that this is an election budget. St Kevin couldn't be too hard in this budget, despite the overwhelming need for tough decisions and facts to be faced, because he intends to call an early election - before the next budget at least.
That would probably be a wise thing to do, because I suspect the next budget is going to be a shocker.
You may have heard of the term Ricardian equivalence. I suggest that you put it into practice by banking what one of RuddWatch's delightful colleagues called her 'Kev Dudd cheque' into your savings account, and leaving it there for a year. You'll need it next year, when Brother Wayne passes the plate around to fill the enormous hole that he and St Kevin have torn in the nation's fiscal fabric.
In any case, Kev's fiscal stimulus plans aren't going according to plan, if this report is to be believed.
But since September, the market has bounced back, creating a huge, unfulfilled demand for the televisions.
"A week before the stimulus package came out, it went absolutely crazy," Mr Kerr said.
Since September shops have been besieged by buyers and retailers are still working through a backlog of orders. "We couldn't get our hands on enough stock," Mr Kerr said.
Plasma screen tellies aren't made in Australia, and imports don't contribute to domestic income and employment. Congratulations - your taxes, earned by the sweat of your brow, just paid for someone else's luxuries!
The boost to the first home owners' grant isn't exactly going to work, either. What it is doing is pulling forward a whole chunk of demand, as guileless newbies rush in to grab the tax cash before the offer expires. This just means that, when the payments do cease, there will be a rather large hole in the home-buying market, down which home prices will fall - just as the recession is getting started. St Kevin's Treasury advisers would have told him this, I suspect - but who listens to the neo-liberals any more??
Thank God for St Kevin, patron saint of social engineering!
Sunday, May 10, 2009
More thoughts on Plimer, Manne, and the value of free speech
Forgive me for going on about it in a third post, but I have had even more thoughts about Ian Plimer's book, and the reaction of the climate alarmists to it.
Much of our society's greatness has come from the open debating and contestation of ideas. The greater the consequences for society of a particular policy or change in understanding, the more crucial and important has been the debate.
The policy that governments adopt on climate change will have significant consequences for society, and not least for the poorer in our society. Thus it is crucial that we have a good, robust and wide ranging debate.
Yet everywhere, we see the climate alarmists either asking for any debate to be shut down, or refusing to debate the issues, instead 'playing the man'. Robert Manne's attack on Plimer makes both mistakes. A review of Plimer's book appearing in the Review section of yesterday's Oz makes the second mistake.
The great Sir Arvi Parbo put it best, in his speech at the launch of Plimer's book in Melbourne on Wednesday: '
"The extraordinary feature of the so-called debate on global warming so far has been that there has been no debate.
“The proponents have virtually ignored the arguments of their critics.
“Instead of debating the issues, there have been open attempts, including, unbelievably, from some otherwise respected scientific institutions, to intimidate the sceptics into silence, accompanied by the extraordinary claim that the science is settled.
“The whole climate change issue has become heavily politicised.
“One would think that if there is evidence that the critics are wrong, the proponents of human-caused global warming would be only too keen to present it.
“If they don’t do so and, instead, try to silence and, sometimes, vilify the critics, doesn’t this suggest that there is no such evidence?”
Something else occurred to me, while reflecting on Robert Manne's ad hom sliming of Professor Plimer.
One of the questions that occurs to us when people like Manne ask us to take things on the authority of the experts is: 'Which expert?"
Sometimes it's not difficult to know, as the experts are in agreement. But sometimes, learned and reasonable people disagree among themselves. Climate change is one area where this happens.
Manne's argument is that we should accept what the experts are saying about climate change - not on the basis of their arguments, but for the reason that they are, well, experts.
A consequence of this is that, for his argument to succeed, Manne must deny Plimer any legitimacy. Hence, Manne never refers to Plimer's scientific qualifications, his knowledge of geology, or any other thing which might give us a reason to think that Plimer knows what he is talking about. Instead, he is dismissed as a pseudo-sceptic - with the 'pseudo' qualifier serving no other purpose than to cast doubt on his bona fides.
In order to make his 'appeal to authority', Manne must necessarily diminish the authority of those who disagree with him, and that means he must 'play the man'.
This is yet another reason why it is always best to judge arguments based on their inherent quality, rather than on who is making them. Apart from leading us closer to the truth, it is also a lot more civilised.
Postscript: Older readers may remember a time when Manne wasn't so keen on using the 'appeal to authority'. Remember his crusade against economic rationalism, against all the advice of the economists? It would seem that the arguments he uses in favour of his position change, depending on how they sought his worldview.
Much of our society's greatness has come from the open debating and contestation of ideas. The greater the consequences for society of a particular policy or change in understanding, the more crucial and important has been the debate.
The policy that governments adopt on climate change will have significant consequences for society, and not least for the poorer in our society. Thus it is crucial that we have a good, robust and wide ranging debate.
Yet everywhere, we see the climate alarmists either asking for any debate to be shut down, or refusing to debate the issues, instead 'playing the man'. Robert Manne's attack on Plimer makes both mistakes. A review of Plimer's book appearing in the Review section of yesterday's Oz makes the second mistake.
The great Sir Arvi Parbo put it best, in his speech at the launch of Plimer's book in Melbourne on Wednesday: '
"The extraordinary feature of the so-called debate on global warming so far has been that there has been no debate.
“The proponents have virtually ignored the arguments of their critics.
“Instead of debating the issues, there have been open attempts, including, unbelievably, from some otherwise respected scientific institutions, to intimidate the sceptics into silence, accompanied by the extraordinary claim that the science is settled.
“The whole climate change issue has become heavily politicised.
“One would think that if there is evidence that the critics are wrong, the proponents of human-caused global warming would be only too keen to present it.
“If they don’t do so and, instead, try to silence and, sometimes, vilify the critics, doesn’t this suggest that there is no such evidence?”
Something else occurred to me, while reflecting on Robert Manne's ad hom sliming of Professor Plimer.
One of the questions that occurs to us when people like Manne ask us to take things on the authority of the experts is: 'Which expert?"
Sometimes it's not difficult to know, as the experts are in agreement. But sometimes, learned and reasonable people disagree among themselves. Climate change is one area where this happens.
Manne's argument is that we should accept what the experts are saying about climate change - not on the basis of their arguments, but for the reason that they are, well, experts.
A consequence of this is that, for his argument to succeed, Manne must deny Plimer any legitimacy. Hence, Manne never refers to Plimer's scientific qualifications, his knowledge of geology, or any other thing which might give us a reason to think that Plimer knows what he is talking about. Instead, he is dismissed as a pseudo-sceptic - with the 'pseudo' qualifier serving no other purpose than to cast doubt on his bona fides.
In order to make his 'appeal to authority', Manne must necessarily diminish the authority of those who disagree with him, and that means he must 'play the man'.
This is yet another reason why it is always best to judge arguments based on their inherent quality, rather than on who is making them. Apart from leading us closer to the truth, it is also a lot more civilised.
Postscript: Older readers may remember a time when Manne wasn't so keen on using the 'appeal to authority'. Remember his crusade against economic rationalism, against all the advice of the economists? It would seem that the arguments he uses in favour of his position change, depending on how they sought his worldview.
Saturday, May 09, 2009
Budget - focus on the numbers, not the spin
I'm afraid to disappoint regular readers this week, but I really don't have much to write about.
The big story is going to be the budget, to be released on Tuesday evening. We're in store for a terrible time. Not only has the economy turned sour on us, but St Kevin de la Grande Tantie has already spent most of the surplus on handouts, not least the increase to the abomination that is the First Home Buyers' Grant.
Soon these handouts will have to stop. We can't just keep handing out billions willy-nilly in a doomed effort to inject buoyancy into asset prices and retail sales. Well, that's what logic would tell us.
The end of the handout culture will also coincide nicely with the other thing which has kept our economy buoyant - high prices for our commodity exports.
So we're going to lose a lot of stimulus, just at the time that we need it. And there won't be anything to replace it because St Kevin, in his wisdom, has already raided the pantry. There's not much left, and we'll have to be borrowing - temporarily, of course - for the next, oh, say, ten years or so.
RuddWatch will be looking closely at the figures for government spending. A comparison with those of the Whitlam years should be instructive. It took us twenty five years to finally overcome the Whitlam legacy. We've had around nine or ten good years - when the economy and the budget have been behaving more or less as they ought to behave. And now, thanks to 'economic conservative but non-extreme capitalism' St Kevin, we're about to go back into the dark ages.
Again, the budget outcome shows in relief the cynicism of the man we have elected to high office. Remember how he used to call himself an economic conservative? He will say anything to get himself out of a hole. Is there anyone out there who still believes anything this man says?
The evidence was on display this week, when St Kevin and heartthrob Penny announced - with serious looking masks donned for the occasion, that the government would have to delay the introduction of the promised emissions trading scheme for a year. This is the emissions trading scheme that was so urgent it couldn't be delayed later than 2010, remember?
The reason given for the delay was the economic crisis. Now the more attentive among you will remember the Treasury's analysis of the scheme, released last year, which essentially said that the scheme would have almost no economic impact. So, if the introduction of the ETS is supposed to be economically neutral, how come world economic conditions necessitate its delay? Somebody's got something wrong somewhere.
Your intuition is correct, dear reader. The ETS will have a substantial effect on the economy. A substantial negative effect. The Treasury analysis was just window dressing to reassure the public - a bit like the ACCC's 'analysis' of the Perth fuelwatch scheme. When Henry Ergas sought background information on Treasury's modelling, it was denied him. Hardly a vote of confidence in the government's assertions.
One thing that really struck me about the changes is that, after all the assertions that a trading scheme would be superior to a carbon tax, St Kevin has changed the rules so that, for the first year of operation, the scheme will actually be a carbon tax - a fixed price with unlimited quantity!
The whole thing suggests that St Kevin and his team really aren't thinking things through very well before opening their mouths.
It's not all bad. I'm hoping that they make it an annual event - complete with this year's 'Greek Tragedy' masks.
Anyway - may you enjoy budget night. In the meantime, I recommend that you read Terry McCrann's columns in the Herald Sun and the Australian. McCrann, for my money, has St Kevin nailed, and is tirelessly ringing the bell on his serial frauds.
The big story is going to be the budget, to be released on Tuesday evening. We're in store for a terrible time. Not only has the economy turned sour on us, but St Kevin de la Grande Tantie has already spent most of the surplus on handouts, not least the increase to the abomination that is the First Home Buyers' Grant.
Soon these handouts will have to stop. We can't just keep handing out billions willy-nilly in a doomed effort to inject buoyancy into asset prices and retail sales. Well, that's what logic would tell us.
The end of the handout culture will also coincide nicely with the other thing which has kept our economy buoyant - high prices for our commodity exports.
So we're going to lose a lot of stimulus, just at the time that we need it. And there won't be anything to replace it because St Kevin, in his wisdom, has already raided the pantry. There's not much left, and we'll have to be borrowing - temporarily, of course - for the next, oh, say, ten years or so.
RuddWatch will be looking closely at the figures for government spending. A comparison with those of the Whitlam years should be instructive. It took us twenty five years to finally overcome the Whitlam legacy. We've had around nine or ten good years - when the economy and the budget have been behaving more or less as they ought to behave. And now, thanks to 'economic conservative but non-extreme capitalism' St Kevin, we're about to go back into the dark ages.
Again, the budget outcome shows in relief the cynicism of the man we have elected to high office. Remember how he used to call himself an economic conservative? He will say anything to get himself out of a hole. Is there anyone out there who still believes anything this man says?
The evidence was on display this week, when St Kevin and heartthrob Penny announced - with serious looking masks donned for the occasion, that the government would have to delay the introduction of the promised emissions trading scheme for a year. This is the emissions trading scheme that was so urgent it couldn't be delayed later than 2010, remember?
The reason given for the delay was the economic crisis. Now the more attentive among you will remember the Treasury's analysis of the scheme, released last year, which essentially said that the scheme would have almost no economic impact. So, if the introduction of the ETS is supposed to be economically neutral, how come world economic conditions necessitate its delay? Somebody's got something wrong somewhere.
Your intuition is correct, dear reader. The ETS will have a substantial effect on the economy. A substantial negative effect. The Treasury analysis was just window dressing to reassure the public - a bit like the ACCC's 'analysis' of the Perth fuelwatch scheme. When Henry Ergas sought background information on Treasury's modelling, it was denied him. Hardly a vote of confidence in the government's assertions.
One thing that really struck me about the changes is that, after all the assertions that a trading scheme would be superior to a carbon tax, St Kevin has changed the rules so that, for the first year of operation, the scheme will actually be a carbon tax - a fixed price with unlimited quantity!
The whole thing suggests that St Kevin and his team really aren't thinking things through very well before opening their mouths.
It's not all bad. I'm hoping that they make it an annual event - complete with this year's 'Greek Tragedy' masks.
Anyway - may you enjoy budget night. In the meantime, I recommend that you read Terry McCrann's columns in the Herald Sun and the Australian. McCrann, for my money, has St Kevin nailed, and is tirelessly ringing the bell on his serial frauds.
Sunday, May 03, 2009
Nullius in verba
Last Sunday, after having written the piece on Plimer's sold out book, I happened to see a piece in the Weekend Oz by Robert Manne about the very same book.
Manne was complaining that the Oz had shown favourable treatment to a book contesting the orthodoxy on climate change, and that this treatment of books such as Plimer's constitutes a 'grave political, intellectual and moral mistake'.
Now, to me, this just doesn't follow. It might constitute an editorial mistake, even a mistake of market positioning, if you wanted to get the greenies supporting your newspaper. But it is hardly an intellectual mistake to cover the publication of a book on climate change by one of Australia's leading geologists. I can't understand what Manne means by a 'political mistake' - perhaps he means support for the wrong policy, in which case his comment is revealing about Manne. And as for a 'moral mistake' - will the editors of The Australian be damned in eternity for publishing glowing reviews of a geologist's book?
What Manne is really on about is shutting down debate. For him, the matter is decided: human actions are causing dangerous climate change, it is imperative to act now to stop or reverse this, and any argument about whether or not the orthodox science is correct will delay our taking action, to the detriment of humanity. Therefore, newspapers ought not to indulge the sceptics, but should focus on the policy debate.
Now this is a respectable position. You can imagine, if you were in a burning house, losing patience with your friends while they quibbled about the source of the smoke quickly filling the room.
The trouble is that it is not self-evidently obvious that human actions are indeed causing climate change. In fact there are good reasons for thinking that the climate change that we are experiencing is driven wholly by natural processes - Plimer has just written a book about them! More importantly, the choices that we make in response to climate change will have considerable impacts on everyone, but the poor will feel it in the greatest proportion.
This is why it is important to have a debate - we have to know whether we are facing a genuine problem, and if so what to do about it.
Now you would think that, if the science really were decided, then it would be simple to demonstrate that Plimer is mistaken. This would be the rational thing to do - the debate would quickly die, and we could move onto working out the best policy response.
So it makes me more than a bit suspicious when responses to books like Plimer's are not of the 'he's wrong, and here's why' type, but of the 'he's unworthy and he ought to be shut out of the public space'. The first thing I think is: what are these people so worried about, that they have to resort to ad hominem arguments?
Manne's piece glistens with ad hom slime. Plimer's writing is 'zealotry'. There are doubts about his 'capacity for fair-mindedness'. The book is 'self-evidently extreme' (really? Apparently questioning the orthodoxy is enough to make one an extremist). He is a 'typical member' of the sceptics camp (what could this mean, to be a typical member?). He is a 'pseudo sceptic' (that's right, he's not a scientist, not even a genuine sceptic, but a pseudo sceptic, whatever that means).
Manne then goes on to say that, with thousands of scientists agreed on anthropocentric global warming, and only a few 'pseudo sceptics' - many of whom are funded by the fossil-fuel lobby - disagreeing, then it is only rational to agree with the consensus of scientists, dismiss the ravings of the pseuds, and move on to the debate about policy.
And because laypeople, such as Manne, the editors of the Oz, and you and I, aren't trained in climate science, then we really ought to just sit back and accept what the scientists are telling us.
This is utterly ridiculous.
We spend billions each year educating ourselves. We do so, in order to be worthy of our democratic inheritance. And some of the skills that we learn are to be sceptical, to think logically, and to weigh and question evidence.
Now from the year dot, as far back as I can remember, I have been told, by worthies in the newspapers, on the telly and the radio, that climate change has been caused by humans and is a real existential problem. Year after year the same evidence has been trotted out. And whenever anyone has got up to say, 'hang on a minute, I don't think that's right', they have been dismissed as self evidently wrong, self evidently extreme, or a 'denialist'.
As far as I can tell, there has never been a proper debate about humanity's role in climate change. The closest that we came was a live debate after the ABC filmed 'The Great Global Warming Swindle', but because time was limited and the atmosphere so tense, it shed much heat but little light.
What I want to know is: what do the scientists agree on? Once we know that, then we can work out where the differences are, and decide from there.
But we're twenty years into this anthropocentric global warming issue, and we've never had a debate between the believers and the sceptics, and we don't know what their common ground is. And Manne, with his calls for passivity, is just perpetuating this unsatisfactory state of affairs.
What we should be doing - what we should have done twenty years ago - is ask hard questions of the scientists propagating the 'global warming' hypothesis. This is what Plimer's book is doing. As such, it is to be applauded and promoted. And this is what the Oz was doing - promoting debate about climate change.
Deliciously, Manne gives his game away about halfway through his piece:
This dilemma is relatively easy to resolve. In regard to the science of climate change, as Clive Hamilton has put it, the only decision citizens have to make is not what to believe but who.
Regular RuddWatch readers should by now hear the alarm bells ringing. If The Unspeakable's name appears favourably, in any context, then it's usually a sign that a poor argument is just around the corner. And our alarm doesn't let us down. What Manne is using is the old 'appeal to authority' - these people are trained to know about this sort of thing, therefore we should trust them implicitly. From that, he assumes that you can judge the value of a person's ideas not by the strength of the argument but by who they agree with. The problem comes with choosing one's authority - who are we to trust? The answer is not to take anyone's word, but to examine their arguments, and support the strongest and most reasonable one.
This is all you need to know about Manne. It's all about having the right opinions. And anyone who doesn't have the right opinions is simply a numbskull, a 'pseud', an interested party, who ought not to have access to the public space. You see, there is no need for a debate - everyone just has to agree with the opinions of the experts that Robert Manne likes.
The rule of thumb that you can disregard a person's opinion if they look like a nutcase works well most of the time. If you hear a self-confessed neo-Nazi or neo-Socialist talking on the radio, you could deduce quite quickly that there is something very wrong with their thinking, and that anything they have to say is not worth listening to. But the rule can be misapplied. And applying the 'nutcase' rule to a Professor of geology who has written a 500 page book is a mistake which gives rise to biased thinking.
The Unspeakable makes exactly the same mistake.
And John Quiggin is no better.
The causes of climate change are things that reasonable people can disagree about. This is because, contrary to what you have been told, and contrary to what Manne alleges (because someone told him so, presumably - he doesn't have an opinion of his own) the science is not settled. That Ian Plimer can write a 500 page book outlining an alternative case for climate change is evidence that it is not settled. The response to the intellectual challenge posed by sceptics ought to be 'show us what you've got, make your case'. That's why I want so much to read the book - I want to hear what the other fellow has to say.
And I am very suspicious whenever the response to an intellectual challenge is a denial of the substantive issues, ad hom ranting, and calls for debate to be shut down.
Update: Plimer appeared on Radio National's Breakfast program on Friday 24 April to talk about his book. I encourage you to listen to the snippet, but allow me to quote Plimer at the six minute mark:
This is actually an attempt to play the man, rather than deal with the science, and it's actually rather poor journalism in my view, because you need to get in contact with the people. They're not stupid, they don't like getting treated with disdain, they don't like the ABC putting its own line of political purity because these people are helpless and disenfranchised. That's why this book has run off the shelves, because people know that they're being conned by the arrogance of scientists and by various media outlets who are creating hysteria.
In a nutshell.
Manne was complaining that the Oz had shown favourable treatment to a book contesting the orthodoxy on climate change, and that this treatment of books such as Plimer's constitutes a 'grave political, intellectual and moral mistake'.
Now, to me, this just doesn't follow. It might constitute an editorial mistake, even a mistake of market positioning, if you wanted to get the greenies supporting your newspaper. But it is hardly an intellectual mistake to cover the publication of a book on climate change by one of Australia's leading geologists. I can't understand what Manne means by a 'political mistake' - perhaps he means support for the wrong policy, in which case his comment is revealing about Manne. And as for a 'moral mistake' - will the editors of The Australian be damned in eternity for publishing glowing reviews of a geologist's book?
What Manne is really on about is shutting down debate. For him, the matter is decided: human actions are causing dangerous climate change, it is imperative to act now to stop or reverse this, and any argument about whether or not the orthodox science is correct will delay our taking action, to the detriment of humanity. Therefore, newspapers ought not to indulge the sceptics, but should focus on the policy debate.
Now this is a respectable position. You can imagine, if you were in a burning house, losing patience with your friends while they quibbled about the source of the smoke quickly filling the room.
The trouble is that it is not self-evidently obvious that human actions are indeed causing climate change. In fact there are good reasons for thinking that the climate change that we are experiencing is driven wholly by natural processes - Plimer has just written a book about them! More importantly, the choices that we make in response to climate change will have considerable impacts on everyone, but the poor will feel it in the greatest proportion.
This is why it is important to have a debate - we have to know whether we are facing a genuine problem, and if so what to do about it.
Now you would think that, if the science really were decided, then it would be simple to demonstrate that Plimer is mistaken. This would be the rational thing to do - the debate would quickly die, and we could move onto working out the best policy response.
So it makes me more than a bit suspicious when responses to books like Plimer's are not of the 'he's wrong, and here's why' type, but of the 'he's unworthy and he ought to be shut out of the public space'. The first thing I think is: what are these people so worried about, that they have to resort to ad hominem arguments?
Manne's piece glistens with ad hom slime. Plimer's writing is 'zealotry'. There are doubts about his 'capacity for fair-mindedness'. The book is 'self-evidently extreme' (really? Apparently questioning the orthodoxy is enough to make one an extremist). He is a 'typical member' of the sceptics camp (what could this mean, to be a typical member?). He is a 'pseudo sceptic' (that's right, he's not a scientist, not even a genuine sceptic, but a pseudo sceptic, whatever that means).
Manne then goes on to say that, with thousands of scientists agreed on anthropocentric global warming, and only a few 'pseudo sceptics' - many of whom are funded by the fossil-fuel lobby - disagreeing, then it is only rational to agree with the consensus of scientists, dismiss the ravings of the pseuds, and move on to the debate about policy.
And because laypeople, such as Manne, the editors of the Oz, and you and I, aren't trained in climate science, then we really ought to just sit back and accept what the scientists are telling us.
This is utterly ridiculous.
We spend billions each year educating ourselves. We do so, in order to be worthy of our democratic inheritance. And some of the skills that we learn are to be sceptical, to think logically, and to weigh and question evidence.
Now from the year dot, as far back as I can remember, I have been told, by worthies in the newspapers, on the telly and the radio, that climate change has been caused by humans and is a real existential problem. Year after year the same evidence has been trotted out. And whenever anyone has got up to say, 'hang on a minute, I don't think that's right', they have been dismissed as self evidently wrong, self evidently extreme, or a 'denialist'.
As far as I can tell, there has never been a proper debate about humanity's role in climate change. The closest that we came was a live debate after the ABC filmed 'The Great Global Warming Swindle', but because time was limited and the atmosphere so tense, it shed much heat but little light.
What I want to know is: what do the scientists agree on? Once we know that, then we can work out where the differences are, and decide from there.
But we're twenty years into this anthropocentric global warming issue, and we've never had a debate between the believers and the sceptics, and we don't know what their common ground is. And Manne, with his calls for passivity, is just perpetuating this unsatisfactory state of affairs.
What we should be doing - what we should have done twenty years ago - is ask hard questions of the scientists propagating the 'global warming' hypothesis. This is what Plimer's book is doing. As such, it is to be applauded and promoted. And this is what the Oz was doing - promoting debate about climate change.
Deliciously, Manne gives his game away about halfway through his piece:
This dilemma is relatively easy to resolve. In regard to the science of climate change, as Clive Hamilton has put it, the only decision citizens have to make is not what to believe but who.
Regular RuddWatch readers should by now hear the alarm bells ringing. If The Unspeakable's name appears favourably, in any context, then it's usually a sign that a poor argument is just around the corner. And our alarm doesn't let us down. What Manne is using is the old 'appeal to authority' - these people are trained to know about this sort of thing, therefore we should trust them implicitly. From that, he assumes that you can judge the value of a person's ideas not by the strength of the argument but by who they agree with. The problem comes with choosing one's authority - who are we to trust? The answer is not to take anyone's word, but to examine their arguments, and support the strongest and most reasonable one.
This is all you need to know about Manne. It's all about having the right opinions. And anyone who doesn't have the right opinions is simply a numbskull, a 'pseud', an interested party, who ought not to have access to the public space. You see, there is no need for a debate - everyone just has to agree with the opinions of the experts that Robert Manne likes.
The rule of thumb that you can disregard a person's opinion if they look like a nutcase works well most of the time. If you hear a self-confessed neo-Nazi or neo-Socialist talking on the radio, you could deduce quite quickly that there is something very wrong with their thinking, and that anything they have to say is not worth listening to. But the rule can be misapplied. And applying the 'nutcase' rule to a Professor of geology who has written a 500 page book is a mistake which gives rise to biased thinking.
The Unspeakable makes exactly the same mistake.
And John Quiggin is no better.
The causes of climate change are things that reasonable people can disagree about. This is because, contrary to what you have been told, and contrary to what Manne alleges (because someone told him so, presumably - he doesn't have an opinion of his own) the science is not settled. That Ian Plimer can write a 500 page book outlining an alternative case for climate change is evidence that it is not settled. The response to the intellectual challenge posed by sceptics ought to be 'show us what you've got, make your case'. That's why I want so much to read the book - I want to hear what the other fellow has to say.
And I am very suspicious whenever the response to an intellectual challenge is a denial of the substantive issues, ad hom ranting, and calls for debate to be shut down.
Update: Plimer appeared on Radio National's Breakfast program on Friday 24 April to talk about his book. I encourage you to listen to the snippet, but allow me to quote Plimer at the six minute mark:
This is actually an attempt to play the man, rather than deal with the science, and it's actually rather poor journalism in my view, because you need to get in contact with the people. They're not stupid, they don't like getting treated with disdain, they don't like the ABC putting its own line of political purity because these people are helpless and disenfranchised. That's why this book has run off the shelves, because people know that they're being conned by the arrogance of scientists and by various media outlets who are creating hysteria.
In a nutshell.
Saturday, May 02, 2009
La Gloire
The first thing RuddWatch thought when I read about St Kevin's plans to expand the material available to the armed forces was - 'Thank God, an Australian government is once again taking the military seriously.'
The package is not entirely good news. The army - the poor bloody infantry, on whom we rely so strongly for defence, for our expeditionary forces and for our middle-power diplomacy ('The Americans want some help - send a brigade of special forces') - is to be left at a strength of eight brigades, which is clearly insufficient for maintaining anything more than a token force in the field. And the army's equipment doesn't appear to have been upgraded. Currently, Dutch regular infantry are as well equipped as our special forces, who are in turn much better equipped than our regular infantry. There is much to be done here.
But the overall approach is one that indicates that the government has recognised that the military has not been equipped to do the job asked of it, that the Asia-Pacific region is experiencing a flux which will intensify in the medium-term, and that if Australia is to have a say about how the region is shaped it must have the military capability to be taken seriously by other countries.
So, in sum, we welcome the expansion.
The problem comes with paying for the program. The current estimate is for spending of about $300 billion over 30 years, or $10 billion each year. This is quite a sizable sum. However, St Kevin hasn't given us a plan as to how he will pay for this spending. Will we face higher taxes? Or will expenditure be diverted from other programs - like grocery watch, perhaps? - to fund the acquisitions?
These are not trivial questions. It's not for lack of trying that previous governments couldn't fund our defence forces adequately. The iron laws of democratic politics dictated that revenue be allocated to more pressing popular concerns, like, um, baby bonuses, and the Fishing Hall of Fame. St Kevin is asking us to take on trust that his government, and a number of future governments, will be immune to these pressures.
You've probably noticed that the budget is under considerable pressure at the moment. The 'magic pudding' years are over for a decade, and Brother Wayne is going to have to beg, borrow and steal revenue from everywhere simply to keep future deficits from blowing out beyond $50 billion - or around 5% of GDP. On top of this, he is being asked to find the money for the defence force expansion and the broadband rollout. At the same time, you can imagine that portfolio ministers will want to spend up in order to bolster their popularity during the economic downturn. Something will have to give here. Unless St Kevin can produce a plan for funding his commitments, then my money's on the defence forces losing out again.
However, the unveiling of the plan caused a few connections to come together in RuddWatch's head. Suddenly, I had a realisation about the true nature of St Kevin.
Let's put a few things together:
1. He has a visceral disdain for anglo-saxon market capitalism, and a strong preference for state-directed, corporatist-type capitalism. This has been made apparent in his essays for The Monthly, his comments in Parliament and at St Paul's Cathedral, his misplaced concern that 'we don't make anything anymore' (memo to Kevin: we do), and also in his willingness to push market forces aside and 'muck in' with industry. He sees the incentives provided by the market as producing many 'second best' outcomes, he thinks he and an army of bureaucrats can do better, and he believes doing so is in the national interest.
2. One consequence of this misunderstanding of, and disdain for, basic economic and social laws is that he is in favour of government spending per se. He betrays no hint that there are limits to this spending, or that it could have harmful effects on the rest of the economy if taken too far. If St Kevin sees a problem, his preferred solution is to throw money at it. Worryingly, this appears to be an impulsive response - there is no cost-benefit analysis, no accounting, no planning. St Kevin has recently taken two decisions to increase spending massively - on broadband and on the military - without having thought through - and I mean seriously considered, beyond just saying 'the private sector will join in, or we'll use general revenue' - how he is going to finance them.
3. Another consequence of this misunderstanding-disdain is overconfidence in the ability of top-down regulation to solve social problems. Sister Julia's proposed changes to industrial relations and wage-setting laws seek to solve the problem of underpayment of workers, but fail to account for the costs associated with doing so in this manner - higher unemployment, slower productivity, and lower economic growth. Not to mention the increase in misery and dissatisfaction among the community which inevitably follows the creation or strengthening of a two-tiered insider-outsider society, with the outsiders losing out considerably. Apparently the solution for unemployed teenagers - of whom there are about to be many more, thanks to a combination of bad financial and economic policy in America and Sister Julia's moral crusade against what she considers poor pay and conditions - is some sort of 'boot camp' arrangement. It might be full of colour and movement, but it will do little to give vulnerable teenagers access to the labour market.
4. A third consequence of the misunderstanding-disdain is pandering to special interests, who are thought to be, of themselves, important for the national interest. Hence we get St Kevin's support for the car industry (memo to Kevin - they are all foreign-owned, their profits, largely consisting of taxpayer handouts, go offshore). This is despite the fact that no-one outside the government, the department of industry and the car industry itself thinks this (have a look at the traffic next time - see all those imported cars that people have bought?)
5. St Kevin also has a strong belief in muscular diplomacy, and Australia's need to be counted as a military power in the region. This sets him apart from many of the prime ministers that we have had.
6. Lastly, there is a tremendous arrogance and lack of consideration for others, be they his own staff, the public service more broadly, or even a humble Air Force hostie. At all times, the most important thing in the world is St Kevin, and the universe in his immediate vicinity must bend to his will or he will regress into a two year old and unleash an almighty tanty.
Now, put all six points together. Does this remind you of anyone, or anything?
Yes, that's right dear reader. St Kevin's true political orientation is French. Or rather, Gaullist. S. Kevin est un Gaullist.
Now, I invite you to spend some time considering the social problems besetting France - the mediocre economy, the insider-outsider labour market, the high unemployment, the massive strikes in defence of ridiculous privileges, the tax evasion and black marketeering, national insolvency from debt accumulated to buy off the masses with an unaffordable welfare state and to pay for ridiculous 'projets d'importance nationale', the unbelievable crime levels, the lack of trust and feeling that one is being ripped off all the time so that one might as well rip off all others. Then add the appalling art and architecture of modern France, Citroen cars, Jean-Paul Satre, unfathomable movies where everyone is moody and desperate, the graffiti and vomit on the Metro, the dog poo on the footpaths.
Quel horreur! A bas les Gaullists!
The package is not entirely good news. The army - the poor bloody infantry, on whom we rely so strongly for defence, for our expeditionary forces and for our middle-power diplomacy ('The Americans want some help - send a brigade of special forces') - is to be left at a strength of eight brigades, which is clearly insufficient for maintaining anything more than a token force in the field. And the army's equipment doesn't appear to have been upgraded. Currently, Dutch regular infantry are as well equipped as our special forces, who are in turn much better equipped than our regular infantry. There is much to be done here.
But the overall approach is one that indicates that the government has recognised that the military has not been equipped to do the job asked of it, that the Asia-Pacific region is experiencing a flux which will intensify in the medium-term, and that if Australia is to have a say about how the region is shaped it must have the military capability to be taken seriously by other countries.
So, in sum, we welcome the expansion.
The problem comes with paying for the program. The current estimate is for spending of about $300 billion over 30 years, or $10 billion each year. This is quite a sizable sum. However, St Kevin hasn't given us a plan as to how he will pay for this spending. Will we face higher taxes? Or will expenditure be diverted from other programs - like grocery watch, perhaps? - to fund the acquisitions?
These are not trivial questions. It's not for lack of trying that previous governments couldn't fund our defence forces adequately. The iron laws of democratic politics dictated that revenue be allocated to more pressing popular concerns, like, um, baby bonuses, and the Fishing Hall of Fame. St Kevin is asking us to take on trust that his government, and a number of future governments, will be immune to these pressures.
You've probably noticed that the budget is under considerable pressure at the moment. The 'magic pudding' years are over for a decade, and Brother Wayne is going to have to beg, borrow and steal revenue from everywhere simply to keep future deficits from blowing out beyond $50 billion - or around 5% of GDP. On top of this, he is being asked to find the money for the defence force expansion and the broadband rollout. At the same time, you can imagine that portfolio ministers will want to spend up in order to bolster their popularity during the economic downturn. Something will have to give here. Unless St Kevin can produce a plan for funding his commitments, then my money's on the defence forces losing out again.
However, the unveiling of the plan caused a few connections to come together in RuddWatch's head. Suddenly, I had a realisation about the true nature of St Kevin.
Let's put a few things together:
1. He has a visceral disdain for anglo-saxon market capitalism, and a strong preference for state-directed, corporatist-type capitalism. This has been made apparent in his essays for The Monthly, his comments in Parliament and at St Paul's Cathedral, his misplaced concern that 'we don't make anything anymore' (memo to Kevin: we do), and also in his willingness to push market forces aside and 'muck in' with industry. He sees the incentives provided by the market as producing many 'second best' outcomes, he thinks he and an army of bureaucrats can do better, and he believes doing so is in the national interest.
2. One consequence of this misunderstanding of, and disdain for, basic economic and social laws is that he is in favour of government spending per se. He betrays no hint that there are limits to this spending, or that it could have harmful effects on the rest of the economy if taken too far. If St Kevin sees a problem, his preferred solution is to throw money at it. Worryingly, this appears to be an impulsive response - there is no cost-benefit analysis, no accounting, no planning. St Kevin has recently taken two decisions to increase spending massively - on broadband and on the military - without having thought through - and I mean seriously considered, beyond just saying 'the private sector will join in, or we'll use general revenue' - how he is going to finance them.
3. Another consequence of this misunderstanding-disdain is overconfidence in the ability of top-down regulation to solve social problems. Sister Julia's proposed changes to industrial relations and wage-setting laws seek to solve the problem of underpayment of workers, but fail to account for the costs associated with doing so in this manner - higher unemployment, slower productivity, and lower economic growth. Not to mention the increase in misery and dissatisfaction among the community which inevitably follows the creation or strengthening of a two-tiered insider-outsider society, with the outsiders losing out considerably. Apparently the solution for unemployed teenagers - of whom there are about to be many more, thanks to a combination of bad financial and economic policy in America and Sister Julia's moral crusade against what she considers poor pay and conditions - is some sort of 'boot camp' arrangement. It might be full of colour and movement, but it will do little to give vulnerable teenagers access to the labour market.
4. A third consequence of the misunderstanding-disdain is pandering to special interests, who are thought to be, of themselves, important for the national interest. Hence we get St Kevin's support for the car industry (memo to Kevin - they are all foreign-owned, their profits, largely consisting of taxpayer handouts, go offshore). This is despite the fact that no-one outside the government, the department of industry and the car industry itself thinks this (have a look at the traffic next time - see all those imported cars that people have bought?)
5. St Kevin also has a strong belief in muscular diplomacy, and Australia's need to be counted as a military power in the region. This sets him apart from many of the prime ministers that we have had.
6. Lastly, there is a tremendous arrogance and lack of consideration for others, be they his own staff, the public service more broadly, or even a humble Air Force hostie. At all times, the most important thing in the world is St Kevin, and the universe in his immediate vicinity must bend to his will or he will regress into a two year old and unleash an almighty tanty.
Now, put all six points together. Does this remind you of anyone, or anything?
Yes, that's right dear reader. St Kevin's true political orientation is French. Or rather, Gaullist. S. Kevin est un Gaullist.
Now, I invite you to spend some time considering the social problems besetting France - the mediocre economy, the insider-outsider labour market, the high unemployment, the massive strikes in defence of ridiculous privileges, the tax evasion and black marketeering, national insolvency from debt accumulated to buy off the masses with an unaffordable welfare state and to pay for ridiculous 'projets d'importance nationale', the unbelievable crime levels, the lack of trust and feeling that one is being ripped off all the time so that one might as well rip off all others. Then add the appalling art and architecture of modern France, Citroen cars, Jean-Paul Satre, unfathomable movies where everyone is moody and desperate, the graffiti and vomit on the Metro, the dog poo on the footpaths.
Quel horreur! A bas les Gaullists!
Subscribe to:
Posts (Atom)
