Thursday, September 2, 2010

Andrew Wilkie ‘Confusion’: Standing for Stable, competent and ethical government

Julia Gillard today inched closer to the 76 seat majority required in the House of Representatives to form government. Ms Gillard and the ALP can count on the support of Greens MP Adam Bandt and now independent MP Andrew Wilkie. Is any of this surprising? Not really, the Greens have always supported the ALP. The story is, however, quite different for Mr Wilkie.

Andrew Wilkie

Andrew Wilkie, a former member of the Liberal Party (who missed out on pre-selection), former Greens candidate for the seat of Bennelong and now the independent federal member for Denison, Tasmania.

Mr Wilkie grew up supporting the Liberal Party, joining the Young Liberals and subsequently becoming a member for the party. After failing to win pre-selection, he joined the Greens as a candidate for Bennelong, John Howard’s previous seat. He was then nominated as the Green’s second Tasmanian candidate for the Senate before finally running as an independent for the division of Denison in this year’s election. Interestingly, Mr Wilkie only received 21.28% of first preference votes in his favour, relying upon the preferences of his previously beloved Liberal party to get across the line.

It is unclear where Mr Wilkie’s political persuasion lies. He has now officially supported the three major parties in some form over his political career; running as a Liberals and Greens candidates and now supporting an ALP government. His confusion about his true political persuasion can perhaps be seen through his lacklustre commitment to the ALP government. Mr Wilkie signed an agreement with the Gillard government to guarantee supply and to reject any unwarranted no-confidence votes, but stressing that he would consider ALP policies on their merit.

He then proceeded to make the same guarantees to Tony Abbott if the Coalition were to form government.

Mr Wilkie is a confused man. He publically declared that he wanted what was best for his electorate of Denison, but rejected $1 billion of funding to upgrade Royal Hobart Hospital because of his concern that this money would be taken away from other electorates. Surely if his primary concern is that of his electorate, it matters not where or how this $1 billion is found or raised?

On the 7.30 Report, Mr Wilkie also expressed his displeasure at the ‘unethical’ invasion of Iraq, which he described as ‘grossly unethical behaviour’ by the Howard government. Just three days ago he stated that Australian troops should be withdrawn from Afghanistan and the Gillard government’s reasons for non-withdrawal as one of the “great lies of the election campaign”. He then gave his support to a party which supported the Iraq and Afghan wars, despite being apparently displeased with both invasions. He is a confused man, and is unable to stand up for his own beliefs.

This shows that Mr Wilkie is simply desperate to be heard and desperate for power that he is willing to please all parties. May be there was a secret deal allowing Mr Wilkie to gain pre-selection as a Labor candidate in the next election? The more  likely (and rational) reason for Mr Wilkie’s support of the ALP appears to be a lingering displeasure with the way he was treated by the Howard government after his whistle-blowing against the Howard governments reasons for going to war in Iraq. I am sure that the people of Denison are questioning their vote for Mr Wilkie (the 21.28% who did vote for him), hopefully they will reconsider their vote if a new election is required.

Tuesday, August 17, 2010

The Hon. Wayne Swan MP, BA (Hons)

Much of the focus of this election has been on Tony Abbott and Julia Gillard, and rightly so. The ALP, Julia Gillard and Wayne Swan in particular, have continuously mocked and ridiculed the Coalition’s economic credentials. In fact, Messr Wayne Swan has been quick and swift to describe almost all Coalition policies as “comical” or “farcical”. A fairly limited vocabulary it seems.


Wayne Swan has a Bachelor of Arts majoring in Public Administration. More specifically, a Bachelor of Arts with Second Class Honours from the University of Queensland. Julia Gillard has a Bachelor of Arts and a Bachelor of Laws. Outside of public office, these credentials would not get either employed at any bank. Yet the Australian public have been asked to believe that Ms Gillard and Mr Swan have the “economic credentials” to lead Australia into the future. In fact, just two Labor ministers hold degrees in either economics or commerce: Chris Bowen and Craig Emerson.

On the contrary, Tony Abbott has Bachelor of Economics and a Bachelor of Law and was a Rhode Scholar. Joe Hockey has a Bachelor of Law and a Bachelor of Arts and worked as a banking and finance lawyer. Andrew Robb has a degree in economics and agricultural science. If anything, on paper at least, the Coalition boasts a stronger economics prowess. Unsurprisingly, these are backed up with their stronger economic policies.

Let us consider a fundamental principle of allocative efficiency. We live in a  capitalist and free market world. Competition drives out inefficiency and a free market is (or should be) allocatively efficient. That is, productivity is maximised as the capital is allocated to those who are able to deliver the best product for the lowest price. In simple terms, a market where companies can compete to provide services (for example broadband infrastructure) will deliver the “best bang for your buck”.

This fundamental principle is reflected in Coalition policy. Mr Abbott has revealed that major infrastructure projects such as broadband infrastructure would be partly funded by private sector investment or private enterprise. The private sector investment would be allocated to a company or syndicate that could deliver the same infrastructure asset for the lowest price. The fact that an Abbott Government would fund part of the project enables and gives Government a monitoring role over the project, while allowing private enterprise to utilise their competitive advantage in building of project specific infrastructure.

The alternative is for a government funded investment, such as the Building Education Revolution (School Halls program) and the Home Insulation Program (Pink Batts program), where fully funded government investment result in ripoffs of the Australian people because this form of investment simply isn’t allocatively efficient. In effect, tax payer money is being put on the table inviting every Tom, Dick and Harry, who may or may not be qualified builders or insulation installers, to take as much of this money as they can. The fact that the government put money on the table as an invitation for Australian tax payers to get ripped off.

Today, Mr Abbott unveiled a plan for the use of infrastructure bonds to fund infrastructure projects. Mr Swan, as usual, described this as comical. I would implore Mr Swan to consider the ingenuity of the Coalition’s policy before making such off-hand remarks. Infrastructure bonds would allow Government to finance projects at a fraction (being the coupon payments) of the price. Furthermore, this would entitle investors in such bonds to a tax rebate plus the added security of an almost risk-free investment. It also adds liquidity and size to the Australian Debt Market. How, possibly, could such a policy be comical?

So what we have is a second class liberal arts student in Wayne Swan purporting to govern US$1 trillion Australian economy who does not understand fundamental economics and does not understand the basic finance theory. Is this someone we can trust to lead Australia into the future? Mr Swan, the only thing that is farcical and comical is your lack of economic credentials.

Wednesday, August 4, 2010

Et tu, Julia Gillard? An Australian tragedy

"Et tu, Brute?", Caesar uttered as Brutus delivered the final blow to Julius Caesar.  Welcome to the Australian Labor Party's depiction of the Greek tragedy starring Kevin Rudd as Julius Caesar, Julia Gillard as Marcus Brutus and the "faceless men" of the Australian Labor Party.

As the Journal of Farcical Exuberance campaigned for Kevin Rudd's removal from office, it seems that Julia Gillard and the "faceless men" of the Labor Party were plotting Kevin Rudd's dismissal as well. At the time, the government faced criticisms on, amongst other things, immigration, the Resource Super Profits Tax (RSPT), climate change and excessive government spending.  Unable to "stand idly by", Julia Gillard felt it necessary to get the government (and Labor Party) back on track.
"I came to the view that for the Australian nation I had a responsibility to step up, to take control and to make sure that this government got back on track ... I have taken control for that precise reason."
Ms Gillard and the rest of the Labor Party feigned their support for Kevin Rudd while they secretly conspired against the then Prime Minister, elected by the Australian people. In response to continued questioning about potential leadership changes, Ms Gillard responded that those rumours were "completely riduculous". Ironically, as the plot unfolded, Gillard emerged victorious as Rudd lay sick in hospital.

If information leaked to Laurie Oakes are to be believed, Ms Gillard's betrayal of Kevin Rudd may be more dramatic than that of Julius Caesar. Ms Gillard remains tight lipped as "an appropriate mark of respect between colleagues".  

The more pressing point, however, is whether Julia Gillard can be trusted to take Australia into the future.  

Recent events suggest that Julia Gillard may be the new queen of spin.  In attempts to seem real and for Australians to connect with the new Prime Minister, Ms Gillard stated that she would ensure the "real Julia" would be on display for the Australian people. 
"It's time for me to make sure the real Julia is well and truly on display, so I'm going to step up and take personal charge of what we do" (emphasis added)
A simple contextual analysis of Ms Gillard's words reveals several pertinent issues. "Real Julia" implies that there is more than one Julia Gillard persona.  "Display" suggests that Ms Gillard has been putting on a "face" or "show" to mask her true persona.  "Personal charge"  indicates that decision making and statements by Ms Gillard have been driven by other person(s) behind the scenes.  More bluntly, is Ms Gillard is a puppet for "faceless men" of the Australian Labor Party?
Labor's re-election bid may indeed be in "deep-trouble". Ms Gillard is up against a Coalition leader who has already claimed two scalps; Malcolm Turnbull and Kevin Rudd.  Tony Abbott's campaign against Kevin Rudd's "great big tax(es)" and the labelling of the Labor Party as being "more spin than substance" brought about the subsequent downfall of Kevin Rudd.  Mr Abbott opened the eyes of working families to the unfulfilled promises and excessive spending by the Labor Party, which as to be funded by two potential great big taxes on Australian people and businesses.

Kevin Rudd's ousting may not have changed much about the Labor Party.  As the new Mining Resource Rent Tax (MRRT) reveals, the Labor Party is content to purchase the support of Rio Tinto, BHP Billiton and Xstrata while disregarding the interests of emerging Australian mid-cap or small-cap resource companies.  Ms Gillard opposed paid parental leave and questioned increases in pension payments to the elderly as "elderly voters did not support Labor".  A recent Australian National Audit Office report revealed that the government's stimulus package spending had been skewed in favour of Labor electorates.

One can only quesiton whether this government is truly concerned about the well-being of working families.

Tuesday, May 4, 2010

Kevin Rudd: Australia's real Robin Hood?

While an Australian actor (Russell Crowe) may play the character of Robin Hood in the new Hollywood film, back in his homeland, Prime Minister Kevin Rudd appears to have taken a liking to to the character.  However, this Prime Minister possesses other significant qualities not present in the original Robin Hood.  Robin Rudd is also the master of "spin", that is, misusing the English language to convince the more ignorant that his policy is for the greater good.  
The Labor leader and his government have decided to impose a new "super profits" tax on mining companies, which according to the Prime Minister, will pay for State infrastructure funds, a 2% decrease in the company tax rate and a 3% increase in Superannuation for all Australians.  In response, 9 billion dollars was wiped of the Australian sharemarket to our Prime Ministers announcement.  Stop.  This Super tax has already resulted in the abandoning of two mining projects in Western Australia, it has wiped off 9 billion dollars of our money. It will cause a loss in jobs, sure employees will get more superannuation, but they are likely to suffer pay-cuts if they are lucky enough to keep their job.  Businesses that service the mining industry will suffer.  This is a mere ploy by the government, as is its new cigarette tax, to grab as much of our money, to fund its failed policies. Make no mistake, this government must go.

Mr Rudd once described climate change as the "greatest moral challenge of our time", and that he would make Australia a global leader in climate change.  His Government then rushed out a Carbon Pollution Reduction Scheme (CPRS) which lacked both clarity and details.  I blogged previously about Penny Wong's refusal to answer the simple question, "by how much will electricity prices increase post 2013?" The Labor government threatened the then Liberals Leader Malcolm Turnbull with a double dissolution if his party did not agree.  Apparently, climate change is no longer the greatest moral challenge of our time, the Government is rolling out ill-thought through policies to ensure Robin Rudd remains Prime Minister.
Previously, in response to the turmoil surrounding the global financial crisis, a $42 billion "rescue pack" was rushed.  The author concedes that this made perfect sense and is indeed grateful for the cash received (which did not get spent in ways which would stimulate the Australian economy). Nevertheless, fiscal stimulus to aid an ailing economy was the right thing to do.  Once again, the Labor government rushed through policies such as the insulation schemes and the "Building Education Revolution" (BER).  The BER suffered shocking cost blowouts and in at least one case the BER attempted to knock down perfectly functional school gym when what the school required was a new library.  The insulation scheme was plagued by the death of a number of insulation installers. As it turns out, dangerous foil insulation was installed creating health hazards thus forcing the government to spend more tax payer money to fix the problem it created.

Peter Garrett was at that time described by Robin Rudd as a "first-class minister", yet Mr Garrett was subsequently demoted from this senior position.  Julia Gillard vehemently denied any cost blow-outs prior to the whistle blowing of several school principals. Penny Wong staunchly refused to give more details about the government's proposed CPRS.  Australians deserve to hear the truth, while this Labor Government may fool the more ignorant, most Australians are beginning to see through Labor's veil. The lastest Newspoll affirms this; with voter satisfaction with Robin Rudd falling to 39%.  Two weeks ago it stood at 50%.

Last month, Labor purported to act immediately (again) with a new Health reform scheme whereby States were to surrender 30% of their GST entitlements to the Federal Government.  Once again, Kevin Rudd was at his menacing best; threatening a "referendum" if States did not agree to his plan.  The Labor government just has not learned; rushed policies are failed policies, and indeed, the Health Reform was not achieved in its entirety as Western Australia did not give in to Mr Rudd's threats.  As an astute user of the English language, one cannot but wonder why Mr Rudd does not understand the idiom: More haste, less speed. In fact, Mr Rudd threw more taxpayer money at the States in an attempt to get their co-operation. As Colin Barnett, Premier of Western Australia described it, "twenty pieces of silver won't work with Western Australia".  This government cannot be trusted to deliver the policies vital to the Australian people, nor can it be trusted with our hard earned money.

Now the Government wishes to impose a new super tax on resources companies. Coupled with an increasing cash rate (interest rates), this spells trouble for the Australian public.  Yet one must wonder why Robin Rudd would even consider an imposition of a new tax. Obviously, the extra funds are required to fund its failed insulation schemes, building education revolutions and all the extra funds used to "suck" States into agreeing to his Health reform.  The Liberals have called for fiscal stimulus to be wound down or even stopped, but this Robin Hood is stubborn, despite increasing inflation rates and interest rates, this government has refused to do what is right for the Australian people.  Instead, it has attempted to rush through further policies in a last grasp election-year attempt to sway voters. The government has attempted to "spin-doctor" its policies as being "for the greater good" or even attempting to avoid responsibility for its failed policies. In the age of globalisation, Australian industries must compete with developing countries such as China or India in the provision of professional and manufacturing services.  These new policies will drive jobs overseas, as we have seen with the Gorgon Project in Australia's North West Shelf.  The greater good will be served with a new government, one that is not run by the Australian Labor Party.  This is the end of the tether; this government must go.

Friday, March 12, 2010

Kevin Rudd's great big deceit

On International Women's Day, Tony Abbott announced a new Coalition policy pertaining to paid parental leave scheme. This scheme would provide mothers with six months of paid maternity leave at their normal salaries up to $150,000. The scheme appears to have been concocted without much support from big businesses or from the Liberal party itself. On the face, the policy does not appear to conform to traditional conservative and liberal policy. 

However, debate about the paid maternity leave policy can be seen as a success from Labor's point of view. Lest we forget, two years ago Kevin Rudd described climate change as the "greatest moral challenge" of our time. The Government has attempted to divert attention away from the failures of Copenhagen and its Carbon Pollution Reduction Scheme (CPRS) by announcing new policies on health reforms and paid maternity leave.

Kevin Rudd's popularity with the Australian public has fallen significantly since the days of Kevin '07, with the Prime Minister becoming better known for being "all hat and no cowboy". Kevin Rudd has failed to deliver upon numerous election promises including the CPRS and hospital reforms. Peter Garrett was "demoted" after the national insulation scheme debacle which further dented the public perception of the government. Finally, KRudd has failed to handle contemporary issues such as rising national debt levels arising from "excessive" economic stimulus and asylum seekers.

In fact, in a recent Q&A program on ABC, when questioned on his handling of the health system Mr Rudd blamed the delay on his predecessors for "ripp[ing] a billion dollars out of the public hospital system". In response, one member of the audience remarked that:

"Didn't you say when you were going to reform the health system that the buck would stop with you, yet you've made two references to the previous government's decisions, and I note you didn't reference the previous government's surplus they left you in terms of the economic crisis. But you said the buck would stop with you, so will it, or are we going to keep hearing that the previous government did this, the previous government did that?"
Mr Rudd was not able to respond coherently to that question. Similarly, Climate Change minister Penny Wong's interview on ABC's Lateline could be described as nothing less than "excruciating". The Federal Minister refused to answer questions put to her by Tony Jones regarding the increased electricity costs to the Australian public which would result through the implementation of the CPRS. The questions put forward include:

TONY JONES: The Prime Minister has spelled out that in the first two years of your emissions trading scheme, electricity prices would rise by 7 and then by 12 per cent in the second year; a total of 19 per cent by 2013. What happens after 2013?

TONY JONES: I’ll just interrupt there because you put out some of the modelling. There’s no modelling, is there, that we’ve seen or that I’ve seen beyond 2013?

TONY JONES: Yes, understood. That’s the difference as you paint it. But let me ask you this: you say that the big question is about the two schemes, but actually one of the big questions is about the costs. So what happens after 2013? What does Treasury model tell you? For example, if your targets go from 5 to 10 per cent, does that mean automatically and exponentially you get a doubling in the cost of electricity from 20 per cent increases to 40 per cent increases?

TONY JONES: Yes, but the open question is: how much will you have to increase? You must have Treasury modelling which tells you what a 10 per cent reduction would be, a 15 per cent reduction, a 20 per cent, or even a 25 per cent reduction in emissions would cost in terms of cost-of-living increases. Do you have that modelling?

TONY JONES: That’s not the only policy question. The policy question that is on a lot of people’s minds at the moment is what this is going to cost. And so I’m asking you: do you have Treasury modelling that tells you what the additional costs will be to electricity and cost of living if your targets increase from 5 to 10 per cent, from 10 to 15, or even to 25 per cent, as you’ve canvassed, if the rest of the world moves?

TONY JONES: Alright, but before the voters go to an election with an emissions trading scheme, potentially, as a virtual referendum on how to deal with climate change - before the voters go to election, are they entitled to know what your modelling is telling you about what different targets would do to the cost of electricity and the cost of living?

TONY JONES: OK, but what happens? Is there an exponential change to the cost of electricity? Does it double from a 20 per cent increase with a 5 per cent reduction in emissions trading to a 40 per cent increase in electricity costs with a 10 per cent and so on, up to 80 per cent with 20 per cent reductions? Does it work like that, or is it somehow different? What does the modelling tell you?

TONY JONES: OK. But before people vote for this in an election, as they are likely to do this year, do you commit to giving the complete Treasury modelling to the public so they can see what happens at the different targets that you’ve proposed?

TONY JONES: Will you release the full Treasury modelling about the potential cost to electricity and cost of living with the different targets?

TONY JONES: But they won’t know prior to the election, based on what you’ve just said, what the potential economic impact is of higher targets.

TONY JONES: Yes, but you’ve already told the rest of the world that you’re prepared to go to 25 per cent if the rest of the world moves. You’ve also set a target for 2050 of 60 per cent, so there has to be large reductions over time, and don’t the public have the right to know what the cost of those increases will be?

TONY JONES: Well, no, we don’t have to, I was just trying to get to the bottom of whether you’re prepared to release that modelling. I think the answer is no.

TONY JONES: If that is the issue, let me ask you this: is it now standard practice to pass confidential departmental briefing documents to the press, or to sections of the press, I should say, as part of a media strategy to undermine the Opposition’s position?

TONY JONES: No, no, I’m not talking about honesty. I’m talking about the way in which this information was released. And isn’t it precisely the sort of thing that infuriated you about the previous government: the use of confidential departmental material to undermine the Opposition’s case?
What we have is a Government who is deceitful and cannot deliver on its promises to our nation. Mr Rudd has purported to paint himself as a contemporary leader, one who is in touch with the younger generation of voters. He has failed, and is now attempting to divert the public's attention away from his failings by announcing new policies.

Monday, January 11, 2010

Rudd versus Asylum Seekers, Asylum Seekers Win

The average Australian earning over $35,000 a year is taxed at a rate of 30 to 45% by the Australian Tax Office each year. This money is used to fund, amongst other things, the Christmas Island detention centre to process asylum-seekers seeking refuge in Australia. It was estimated in 2004 that each detainee was costing the Australian people up to $725 per day. More recently, it has been revealed that the Christmas Island detention facilities had cost the Federal Government $45 million  more than it had budgeted for this year. More taxpayer money is being pumped into the centre to boost its capacity.

Prime Minister Kevin Rudd has previously stated that the Christmas Island detention facility was bad policy and that it was a "white elephant". He is now being forced to pump more taxpayer money, money which the taxpayers have had to work hard to earn, to support a bunch of asylum seekers who have not followed the proper policies laid down by the United Nations High Commissioner for Refugees (UNHCR). In fact, the recent standoff by the Oceanic Viking and the subsequent granting of asylum to two Sri Lankans demonstrates Mr Rudd's inability to defend the sovereignty of Australia.

One of the most fundamental rights of a Sovereign State since the Treaty of Westphalia (1648) is the right exercise supreme authority over all subjects within its territory, including the power to make and enforce its laws. While the issue of asylum seekers is a global issue, Mr Rudd's lack of a coherent policy to tackle this problem has exaggerated the issue for Australia. As Opposition Leader Tony Abbott aptly described it:

"[This] shows that Mr Rudd was blackmailed ... effectively blackmailed, into giving people what they wanted ... they held that ship for about a month and that shouldn't have happened. It seems every day another boat (carrying asylum seekers) arrives". 

Furthermore, Mr Rudd's policy of redirecting the boats to Indonesia creates two problems. Indonesia is apparently justified in processing these asylum seekers because of the monetary assistance Australia has provided to fund its detention centres. This doesn't solve any problems, it is merely passing on the issue to Indonesia. It also strains relations Indo-Australian relations. Secondly, as Mr Abbott rightly points out, it sends the wrong message to asylum seekers that "if you get to Indonesia you also get to Australia, because of the deal that Mr Rudd did with the people on the Oceanic Viking".