Monday, 30 January 2012

Straight with the public? Not Julia Gillard

After a first term of learning the ropes and settling down, a second term government should feel like a team that is just moving into third gear.

That does not describe the Gillard Government.

It feels like, seems like, and smells like, a government in its death throes with one controversy after another. The Gillard team is the team that keeps on giving. Dumping Harry Jenkins to appoint Peter Slipper as Speaker brought Gillard's 2011 year to an end with a bad taste in everybody's mouth except Slipper's and this year's start has been equally malodorous.

Believe it or not, most politicians try to maintain some semblance of a reputation for being straight with the public. Not Julia Gillard. It is one thing to justify the dumping of pre election policies because Labor did not win a majority. It's another thing to dump the Wilkie policy promise, given after the election, with the express purpose to secure the prime ministership.

The latest fracas on Australia Day is just another example of how Gillard operates in two ways; spinning and always in concert with the unions.

When media adviser Tony Hodges became the sacrificial lamb, Gillard declared that neither she nor her new Director of Communications was aware or authorised what happened. I half believe her because no authority would have been required. Labor's tactics against Abbott are Labor's standing operational procedure. They are as obvious as they are useless. You only have to read what they say.

John McTernan, Gillard's new Director of Communications, is a former spinmeister for Tony Blair. Blair's constant spin was one reason that led to his political demise. In an article in The Scotsman, McTernan used a quote from a well known Tory to advocate his approach to politics. In a discussion about politics in Scotland he said;

"Michael Heseltine was once asked for advice by someone thinking of becoming an MP 'Don't do it," he said, 'if you're only thinking of becoming one." His point - you need to want it. How do you become First Minister of Scotland? Simple. Malcolm X was right: 'By any means necessary." If you're not prepared to follow his advice, you should avoid politics as a career."

McTernan seems to believe that the ends justify the means. The simple point is that Hodges did not have to ask anyone before he organised to rev up the people at the Tent Embassy.

For 24-hours, Gillard's office must have been pleased with their dirty work. The next day, Friday, I was doing Sky Agenda with Stephen Loosley. He was running the line that Julia is such a great lady that she was concerned about Tony Abbott's wellbeing. The idea of Gillard being worried about Abbott certainly sounded phoney to me, but I did not know otherwise so I said nothing. I doubt Stephen needed a briefing, but there is no doubt that the people running that line to the press and others were the same people who were ringing the Tent Embassy. Even on Saturday, the Age was saying Gillard had 'won praise for acting to ensure Mr Abbott got safely away".

How sneaky was that! The PMs Office manipulated the situation and then boasted how well Julia handled it! It was like something out of Anthony Albanese's DVD collection of West Wing except it was for real.

Setting a large crowd onto Abbott is in a different class to the situation where a staffer rings a journalist to say 'did you notice that MP X said something silly". In this case the media reports are that the phone call went to the Tent Embassy with details of Abbott's location to suggest that people go round and vent their spleen. The call for a proper inquiry is entirely justified.

The riot also raises questions about the ACTU involvement.

This saga is certainly another example of how Gillard's Government is so hand in glove with the unions that the unions are 'helping" day-to-day throwing dirt against Abbott. The person who was the go-between the PMs Office and the Tent Embassy is reportedly the head of the ACTU in Canberra. The unions know where their bread is buttered. It would be interesting to know how many other union people were brought in for the riot. It would not be the first time.

When you look back at the last 12 months Gillard has bent over backwards to give the unions whatever they want.

She is abolishing the ABCC, the cop on the beat in the building industry, because the unions don't like having to pay fines for breaking the law.

She has agreed to various pro-union clauses in the proposed national occupational health and safety scheme and so the end result is that the reform has been stymied. The increase in the super from 9 per cent to 12 per cent is another gift to union controlled funds.

Doling out cash to the car industry is another example. The AMWU is a big union in the car industry and controls votes in the caucus. Of course, Gillard only became PM by virtue of union votes in the caucus.

Sadly, with no election in sight this year, although anything is possible, the political contest will be more of the same and Gillard's standing will continue to fall. Whether Labor can then overcome its delusions and remove Gillard remains to be seen. But, it is hard to believe she is going to survive much longer.

Given that politics looks gloomy and the riot generated an unhappy scene, at least, the increase in Indigenous employment as reported last week is one bright light on the national agenda.

As a former Minister for Employment I know that governments from both sides have encouraged Indigenous employment.

But the real story can be found in the private sector efforts of miners like Rio Tinto and Andrew Forrest and their employees, Indigenous and otherwise, who have shown how the private sector can achieve fundamental and positive social change through economic success.

Saturday, 21 January 2012

Wilkie and Gillard deserve each other

The agreement between Andrew Wilkie and Julia Gillard.

I have seen some broken promises in my time but this one is in the top ten.

Mr Wilkie told people in his electorate that he would abandon the Labor Party if they reneged on the Agreement. It is clear that Labor has now reneged on the Agreement by refusing to honour the gambling reforms sought by Mr Wilkie. To add insult to injury,  Mr Wilkie has also broken his promise by accommodating Gillard's breach of the Agreement.

This outcome was obvious months ago to me and others but Mr Wilkie is so close to Labor he could not see the inevitable.

Wilkie and Gillard certainly deserve each other and hopefully they will both be tossed out of office at the next election.

Details of the Agreement

Friday, 20 January 2012

The Fair Work Review is underway.
The background paper for the Review has material which you may find useful, including various statistics.
A range of statistics are also on this blog.
The links to the Review paper:

Tuesday, 17 January 2012

Stuck in reverse: Labor and the auto industry

Protectionism through subsidies and tariffs has been a vexed issue for well over a hundred years in Australian politics.

Under Whitlam in the mid-70s Labor slashed textile tariffs, one of Bob Hawke's better reforms was to cut tariffs and open the economy, John Hewson and the Coalition from 1990 to 1993 advocated zero tariffs, Paul Keating then ran the rather absurd claim that his 5 per cent minimum tariff was somehow different and Howard cut many tariffs further. In contrast, Gillard looks like she has little interest in the policy but is prepared to fund the motor vehicle industry with even more money and with no strings attached.

It is no wonder that Joe Hockey, the Coalition's shadow treasurer is reported to have drawn a line in the sand. As Labor lurches backwards, the Coalition needs to protect its reputation as good economic managers.

A string of budget surpluses from the Howard years saved Australia from the impact of the financial crisis and, politically, Labor's unprecedented waste of billions of dollars in the stimulus program is reason enough for voters to support the Coalition. Likewise, Australia's economy is stronger for the reductions in tariffs and subsidies by both political parties over the last 25 years and the signs of Gillard backtracking is a threat to good economic management and ultimately a blow to jobs and living standards.

The days of subsidising the car industry should be coming to an end in 2015 as proposed by John Howard. Demand for locally-made cars has been falling and all the excuses for more taxpayer funds become thinner every year.

The issue for the Coalition is how to handle the politics. When Labor was in office, the Coalition supported Labor's tariff cuts so Hawke had a relatively easy run. Howard indemnified him against the political fallout. Unfortunately, Gillard is playing the populist card although pro-free trade ministers like Craig Emerson must be aghast at her approach.

Once again, union politics is a big factor; the subsidies are worth up to $100,000 per annum per worker (for details see here). The AMWU is a powerful union and not only supports Gillard but also numerous Labor MPs who are in Parliament as a result of its patronage. So these MPs are more worried about their own jobs than anybody else.

Bob Hawke can at least see the problem which is why he said the unions were "suffocating" Labor. Julia Gillard took only a nanosecond to dismiss Bob's comments. Gillard will basically hand out any amount jointly requested by the AMWU and the car companies.

The first point to note for the Coalition is that Gillard's biggest weakness is economic management. To win, the public need to expect that the Coalition will be better. So the Coalition has to nurture its credentials as a responsible economic manager. If people think the Coalition is just as likely to waste money as Gillard then the Coalition's re-election prospects are weakened.

Secondly, the Coalition advocated zero tariffs in 1990 but the policy that was its undoing was the GST not tariffs. It's a big issue but it should not be inflated. State Labor did not lose office in South Australia when Mitsubishi closed nor was there political fallout from the Nissan closure in Melbourne.

Thirdly, the car industry is not just in trouble by virtue of its own failures but also because economic policy is not as good as it could be and Gillard is about to make it even worse. So before signalling the demise of vehicle manufacture in Australia, either party could adopt policies that might actually give the industry a chance to survive, albeit under a different economic regime and without tariffs or subsidies.

The carbon tax will be a burden on the industry so it needs to be repealed.

Industry is weighed down by payroll taxes so they should be abolished.

The unions have had far too much say in running our car factories and a more flexible workplace relations system would be a big boost for the manufacturers. Labor has just done a special deal for the blue water shipping industry by exempting them from the Fair Work Act, and whilst obviously the car industry is very different, where there is a will there can be a way forward. Of course, none of these ideas will ever be agreed by the ALP or the unions so they will not happen but no-one should be under the illusion that the only help available is unlimited cash.

The most comprehensive policy to support manufacturing was Fightback! in 1991. When that policy was lost in the 1993 election, the Coalition remained pro-free trade but with less enthusiasm. When the Howard government was elected, we did a deal with the car industry and John Howard said at the time it was one of the best decisions he had made.

I was dismayed by the cabinet decision and I was not alone amongst senior colleagues. Despite misgivings, the Coalition party room endorsed the deal. The party room today is probably not quite as submissive as it was then but it will have no urge to challenge more handouts for seats like Corangamite, in the Geelong area, where we have a good chance of picking up a Labor seat.

So, the Liberals will not split on the issue but when senior party and business figures like Ron Walker, former Victorian premier Jeff Kennett, Don McGauchie and MPs such as Don Randall and Mal Washer speak out publicly, then you can be certain there will be a lot more agreeing with them in private.

The best result for Australia would be if the Government consulted with the industry and agreed a staged transition timetable for the end of subsidies and the abolition of the 5 per cent tariff. The current rules for the import of second hand cars should also be wound back as has happened in New Zealand. Second hand cars are much cheaper in NZ. In this scenario, the Coalition could support Labor and Australia would benefit. If this does not happen, then the Coalition needs to formulate a policy that is consistent with good economic management and that includes a comprehensive and integrated approach with fiscal and labour market policies.

Tuesday, 10 January 2012

The spirit of our constitution

The spirit of our democracy doesn't lie in the constitution


If you find politics interesting and want some holiday reading then try Robert Putnam's Making Democracy Work. His research and writing is not party political, but it penetrates some of the big issues in democratic politics.

The Putnam research into the differences between politics in the north and politics in the south of Italy provides some fascinating data on underlying social capital in Italy and consequently the differences in the type and quality of regional governments.

Without trying to provide a summary of Putnam (there is a lot of material on the internet), for me, his work reinforces the reality that the beating heart of our democracy is not to be found in legislative enactments, but in the egalitarian spirit of the Australian people.

Whilst, of course, our formal institutional arrangements are fundamental to the success of our political system they are not everything and certainly are framed by concepts such as an independent judiciary and a free press. The Australian constitution is now part of that mix but Australian citizens were already free and imbued with the democrat spirit well before the constitution came into effect.

Sometime between now and the 2013 federal election there will be two proposals to change our constitution. One of the defining aspects of Australia's constitution is that it can't be changed without first being put to the people in a referendum. State parliaments have also made allowance for direct democracy and a majority of those plebiscites have been passed.

At the federal level, most referenda have been lost and, in my opinion, the most common reason for rejecting referenda has been that many propose an increase in Commonwealth powers at the expense of a more decentralised political system. The Australian public have often shown they are not keen on centralising power in Canberra; they prefer political power to be more diffuse.

The two proposed referenda have not been announced.

One will propose that the federal constitution recognise local government. A similar proposal in 1988 was convincingly rejected and it will defy history if it is not rejected for the second time. One simple reason taxpayers money should not be wasted again is that the local government proposal will only add a layer of confusion when most people would expect the second referendum to be more important.

Details of the proposal for a referendum to acknowledge Aboriginal and Torres Strait people in the constitution have not yet been released. Apparently the details will be released this month. I do not prejudge the proposal, although it does raise some questions.

Firstly, as others have said before, the genius of our system for constitutional reform is that the people are not just masters of the final steps toward successful change but in the past, the first steps have also been conducted under the public supervision of the people.

The matter of process is not a side issue. John McMillan who wrote in the early 1990s about referenda with Gareth Evans and Haddon Storey (LIB Vic) put it this way:

Agreement on the procedures for constitutional debate is as important as the proposals themselves.

And in Papers on Parliament Number 13 in November 1991 he said about the 1988 referendum:

...the referendum was held before the Constitutional Commission had finally reported, one of the four proposals was framed at variance with the Commission's Interim Report, there had been no real public debate, national and state opposition to the referendums seemed certain, and the Government adopted a low key strategy that the proposals should largely sell themselves.

On this occasion I am not sure that the process will be any better. The process was initiated by the Government and the Greens before the people had any say at all. As a result, instead of a public debate, the handpicked committee are now pressing their case before the people have been given any say at all. The process will produce a fait accompli; a "take it or leave it" option. I expect there to be a lot of debate about the proposals but the Government's failure to honour past practice of a people's convention or at least a substantial commission, has already undermined any prospects of success.

Secondly, if the proposal is likely to change the basic structure of the constitution then its prospects will be minimised. In 1988, the Hawke government proposed the incorporation of a mini bill of rights. The intent was to provide for freedom of religion, trial by jury and compensation for property acquisition.

In each case, obviously there was, and still is, strong public support for the concepts. And initially when polled, it seemed that each proposal would have support above 70 per cent. Prior to the 1988 vote, the worst result for a referendum was 34 per cent in the Whitlam years. The rights referendum set a record low of 30.79 per cent. No-one could possibly suggest that the result indicated a lack of support for freedom of religion. The advocacy of a 'No' vote by the Australian Catholic Bishops Conference did not signal anything other than a concern about how the constitutional change could have unforeseen consequences which would then be difficult to change. And given that there was no pressing need for change, the proposal was defeated.

One of the strongest arguments was the problem inherent in a bill of rights. That problem arises when the words in the constitution end up before unelected judges who then have to decide what it all means. In the US, this has triggered huge profits for lawyers and policy uncertainty for everyone else and no greater freedom of religion than here.

The whole point about our constitution is that it never claimed to be the "be all and end all" of people's rights. However worthy may be one cause, I doubt that the Australian public will support a significant rewriting of a constitution that has worked so well for so long.

For me Robert Putnam's work demonstrates that the spirit of our democracy is more likely to be found in the hearts and minds than in the constitution. And similarly the future wellbeing of Australians whether Indigenous or otherwise will be more in their own hands and good government than in constitutional reform.