Monday, July 28, 2014

On Refugees - with apologies to AA Milne

Friend Red Steel just sent me this comment on refugee policy...

Yesterday upon the sea,
I saw a not-there refugee
He was not there again today
I wish, I wish he'd go away

Wednesday, July 16, 2014

Senate to decide fate of Senate NBN Committee

A motion before the Senate today proposes replacing the existing Senate Select Coommittee on the NBN with a new Joint Committee. Those who fondly remember the scrutiny the former joint committee put on the NBN should be under no illusions that this committee will do the same.

The new Committee will be constituted with a majority of Government members (5/4). Anyone under any illusion of how the Government will use its numbers need only look to May Estimates where the Government used its numbers to limit the time available for the NBN and indeed to finish half an hour early.

The reconstituted Joint Committee also does not have analysis of the various reviews in its terms of reference. This will limit the public scrutiny of the Cost Benefit Analysis and so if it is littered with methodological flaws in the same way as the Strategic Review was these will not be scrutinised.

The disgraceful part is that the Palmer United Party Senators are supporting the change. It is well known that Mr Palmer thinks the NBN is an excessive investment of resources and the Government should only be contributing in regional areas. But that is no reason to hide what the Government is doing from scrutiny.

Let's be clear, the policy choice point is not between the NBN and No NBN, it is between building a fibre to the premises network in one stage rather than two or more. Which is the most cost effective pat his the subject of the Cost Benefit Analysis - the Strategic Review was only a costing exercise (and a poorly conducted one at that).

To hide the NBN from effective review is counter to everything Palmer claims he stands for. What did he trade Malcolm for his support at that dinner?

For the record the Minister has said some silly things about how we got to a Senate Select Committee rather than a Joint Committee and claims Jason Clare was rolled by Senator Conroy. The facts are that when Parliament resumed after the election Mr Clare proposed the Jount Committeebe reconstituted with the same structure - half each side with an independent chair (Oakshott). Turnbull insisted on a smaller committee with a majority of Government members. 

At the same time Labor had progressed a notice of motion to institute the Senate Select Committee. When Turnbull became aware of this he offered equal numbers, but still Government Chair(and casting vote). Mr Clare advised Mr Turnbull that was too late.

The best solution would be for the PUP to agree to amend the motion in the Senate, to make the numbers 5/5 of Govt vs ALP/Greens with a PUP chair.  I understand PUP has expressed no interest in the committee. This surprises me given how stridently Senator Lambie speaks out in behalf of Tasmanians. Tasmanians were systematically deceived by Mr Turnbull about his intentions for the NBN in Tasmania before the election.

If PUP are concerned about the resources required to undertake the Chair's role I can organise a pose of volunteers to help them.

And let's be clear. I am a fan of the NBN as it is. But if a properly constructed case can be made that the move to an all fibre network can be made more cheaply in two or more stages than one I am all for it.  I just don't accept arguments that 25 Meg is more than enough for an average household, or that even a 50 Meg outcome for 90% is sufficient.

Time to get active.

Monday, June 30, 2014

Announcing 'The DigEcon Gazette'

I have started a new blog with the intention of placing my digital economy and ICT policy related commentary in a separate place, it is The DigEcon Gazette.

Thursday, June 12, 2014

Joe Hockey and THAT budget

This morning's SMH reports that Joe Hockey has resorted to his three key themes in a speech selling his Budget at the Sydney Institute (which is of course the wrong audience, they would mostly already be convinced.)

The first is to call opposition to the budget "class warfare." The second is to say criticism of the budget is all political, or it is politics not economics.  The third is to say it is not the job of government to pursue equality if outcomes but equality of opportunities.  

In reverse order, how does one measure equality if opportunity except by measuring the equity of outcomes? Surely if there were genuine equality of opportunity there would be equality of outcome. The only deviation could be from differential effort or dumb luck in terms of natural endowment, inherited endowment or simply being in the right place at the right time. 

If equality of opportunity were genuinely achieved then there would be no differential effort as each person would equally be aware of the opportunity before them. The opposite is the equivalent of blaming the unemployed because they haven't found a job, rather than blaming society for there being no job to find.

The variability of endowment is not something within the individual's control. Gina Rhienhart was doubly lucky, first to be born of Lang Hancock and secondly that Hancock was the one who discovered the Pilbara ore.  Many prospectors gather on a goldfield, only some find big nuggets.

The distinction between politics and economics is a false one. To the extent that economics is positive - a description of what is - it is no guide to action. To the extent that economics is normative - it describes what ought to be done - it is better known by its original name, political economy.

And to stand up for ordinary Australians, the Australians who make their living by what they do rather than by what they own, is not class warfare. The Labor Party makes no apologies for this, we do not represent the interests of capital. That does not mean we are the enemies of capital. Just that the design of markets and the distribution of surplus value must treat those who work for a living fairly.

Surely it is not too much to ask that the Treasurer resort to selling the budget on its merits rather than on slogans.

Wednesday, June 11, 2014

Media Diversity

Unsurprisingly The Australian did not publish my letter to the editor below defending Malcolm Turnbull.

Your editorial ‘Malcolm’s excellent adventure’ (The Australian 6 June) contained the most extraordinary claims about the Minister for Communications, namely that he has been something other than a team player as Minister.

A fact used as evidence for the claim is the disloyalty to conservatives displayed in launching Morry Schwartz’s The Saturday Paper. This is the Minister who is proposing to weaken cross media ownership laws in a move widely perceived to favour the interests of News Corp.

The Minister on launching the paper sought to make the case that the current laws are not required to ensure diversity. This is the case he needs to make if reform is to occur.

The Australian has long made the case that it is entitled to be a conservative newspaper. So too are Schwartz’s stable of publications entitled to be ‘left-wing’. The Australian has feasted on a series of NBN stories largely provided by Mr Turnbull’s office

Mr Turnbull might add to his list. Why with friends like The Australian do the Liberals need enemies.

The simple fact is that Mr Turnbull at least recognises the importance of diversity in news coverage, a diversity that is important to the operation of democracy. This piece in On Line Opinion captures the essential elements of that argument. However its conclusion is wrong - the media doesn't need to be "impartial" (which is not the same as accurate or even objective) so long as it is sufficiently diverse in the range of partiality represented.

I have also previously commented that the actual influence of the Murdoch press is probably over-rated. The difficulty is that it is Mr Murdoch himself that wants us all to believe how influential he is.

So on this day as Mr Abbott has dined with the person I think the PM has called Australia's greatest businessman (who has chosen to live in what Mr Abbott calls the world's greatest country) let us hop that the conversation might have been two way. Let us hope that Mr Abbott explained that any change to cross media ownership laws has to be based on preservation of diversity rather than Mr Abbott just turned up to take orders.

Logical confusion in privatisation policy

'Asset recycling' is the current buzz phrase developed by the financial sector to convince politicians that they should part with some assets to raise money to build other assets. It all sounds terribly sensible, until you do some rudimentary analysis.

The first is about the nature of the assets. Selling an asset with a dividend stream (like electricity distribution) is totally different to building infrastructure that doesn't have a direct return to revenue (like the roads for Sydney's second airport). John Quiggin called it "melting down your tools to pay the rent."

Queensland to its credit is being a little trickier - it is using a quasi-equity instrument that Quiggin elsewhere discussed under the heading 'If it looks like a debt, walks like a debt and quacks like a debt...'
But it becomes even more bizarre when we hear about the visit of the PM to Canada. According to the AFR he has spruiked the value of investing in Australian infrastructure to Canadian pension plans. The story however includes some interesting facts.

Canadian entities have $27 billion invested in Australia, but Australian firms have $54 billion invested in Canada. We are told The Economist calls Canada's 10 pension funds the "maple revolutionaries" - but we then learn that the $1.1 trillion funds rates them sixth behind the US, Japan, the UK, Australia and the Netherlands. We also learn that the average Canadian allocation to infrastructure of 5% is second only to Australia.

The Canadians don't need much encouragement. The Canadian Pension Plan bought Broadcast Australia from Macquarie Bank.  Ontario Teachers bought 70% of NextGen which counted among its assets the telecommunications transmission built by the Regional Broadband Blackspot Program.

The first of these needs a bit more explaining - since a major part of Broadcast Australia is the old National Transmission Authority privatised by the Howard Government. Its assets are a series of broadcast towers and two big contracts with the ABC and SBS for transmission.

But it is these very contracts that are at the heart of one of the considered savings from the Lewis review. I'm not exactly sure what potential Canadian utility investors will think of that.

But can we just consider how idiotic it is that we are suggesting that Governments, especially State Governments with unfunded superannuation liabilities, are selling assets to other superannuation funds (some of which are for Government employees) for the purposes of converting future dividend streams to upfront cash?

The situation gets even more absurd with the NSW idea of 99 year leases.  These are a sop to the community so that it looks like the assets aren't being "sold." But the electricity grid only came into existence 110 years ago, and it puts off to the future the issue that for the last ten years or more the lessee has no incentive to invest in maintenance. 

If you want to convert a future income stream to an immediate cash injection that is easy. You do something akin to the Queensland structure, the important part being that the income is entirely guaranteed by the entity not the State. But you don't need to call it privatisation - and you don't need to spend the very unhealthy amounts of money with lawyers and bankers required for a sale - whether by trade sale or IPO.

While Mike Baird has made great play of the infrastructure he proposes to build, one quarter ($5 of $20 billion) is supposed to come from the interest earnings on the money raised by the sale.  As private investors can be assumed to be rational, this $5 billion in interest must be less than the dividends foregone.

The biggest issue though is the argument being spun by Baird that the privatisation will reduce electricity bills. This argument is based on research that one column said "was released to the Daily Telegraph." That is a tall claim - since the column was written by Brendon Lyon who is CEO of Infrastructure Partnerships Australia.  This looks to be Australia's institutionalised infrastructure construction cartel. The research "released" to Mr Lyon was actually commissioned by his organisation from Deloitte Access Economics.

I cannot find the full research. The IPA (known in policy circles as "the other IPA" to distinguish it from the Institute of Public Affairs) press release simply notes:

The modelling of NSW consumer price impacts from electricity reform was undertaken at arm’s length by Deloitte Access Economics for Infrastructure Partnerships Australia. This modelling forms part of a larger research programme that considers the structure and reform of the National Electricity Market. The modelling will be released in its entirety over the coming months.

The release is quite upfront that these savings occur over 15 years. The only possible basis for this is the idea that incentive regulation - that is capping a company's prices to rate of return regulation on a regulated asset base and letting it keep efficiency savings - works.  But that only works to the extent the firm makes bigger profits - not that prices are any different. Without the full report it is impossible to analyse this any further. And consistent with all such claims of what modelling "shows", if the model isn't available for interrogation the output is worthless.

All of this shows bureaucrats and politicians totally in thrall of an unproven superiority of private sector firms.

Meanwhile tonight I am going to hear Gavin Gatenby of Ecotransit Sydney. Gavin has a great video on the 'Great Rail Rip-off' that highlights the extraordinary cost of infrastructure construction in Sydney. He has another that highlights that the "rapid transit" model chosen for Rouse Hill to Chatswood is inappropriate for that section - let alone an extension through the city. It is not so much about the trains as it is about the tunnels!

And these videos pose the final question - why do we need to privatise electricity assets to build a privatised metro that creates a new harbour crossing that can't be used by the rest of the network?

The campaign needs to also go to the Northern Beaches. As we plan for a new Harbour Crossing we should also make the future plans for an underground rail line at least as far North as Mona Vale.

Tuesday, June 10, 2014

Preventitive Health - Nanny State or Growth Strategy

The Australian breathlessly (pun intended) reported last Friday that tobacco plain-packaging laws had failed as cigarette consumption had actually increased.  The article relied on one market research study and anecdotal evidence.

Stephen Koukoulas on his blog pointed out that the core of the story was simply wrong...and to do so he relied upon the ABS National Accounts figures for sale of tobacco products. And quite frankly I'll take the ABS over InfoView.

Now there is the possibility that both are right - because another part of the claim is that additional excise on tobacco has simply moved people to cheaper brands - and so there could be an increase in volume together with a decline in dollar value sales.

But that argument has nothing at all to do with plain packaging!

The Kouk makes the equally valid point that if the plain packaging law was INCREASING tobacco sales rather than decreasing them, the tobacco industry would be wanting to retain them rather than eliminate them.  Yet this isn't the industry's behaviour.

But what is far more worrying is the follow-up story in The Australian on Saturday. Here Coalition backbenchers are reported to favour repealing this "Nanny State" law.  And this is where the poor thinking becomes important.

The question that they need to understand is why does any Government care about how many people smoke? And the short answer is because smoking costs the economy a lot. It costs the economy in two ways. The first is the cost of avoidable health care. And if you don't know the long drawn out respiratory conditions require a lot of hospitalisation and treatment. The second is in shortened life expectancy. The two biggest economic inputs are labour and capital; and despite the rhetoric of the "labour market" not all units of labour are the same. In particular people in later years have developed many useful skills, reflected in the higher incomes of older workers. Reduced effective working life from smoking is a major negative on economic output.

Alex Hawke is quoted as saying "I think our policy should be evidence-based and where governments get the best bang for their buck; that is on individual responsibility rather than big government."  The fact is that the plain packaging is exactly the kind of thing he should support.  It is a very low cost to Government (once introduced virtually free) and it is Government rather than the individual that gets most of the benefit. Admittedly there was a high implementation cost for industry and especially retailers. But that one off cost has occurred and is now sunk.

The second view comes from George Christensen who says "If we honestly believe that smoking is that evil, we should have the guts to ban it. If we don't feel that strongly about it, get out of people's lives." The two of them should really talk, because a ban is exactly the wrong policy because it has far higher implementation costs for Government. Bans are effective only to the extent they are enforced -as every prohibition movement - alcohol in early 20th century America and the war on drugs - proves.  And, of course, a ban really is the "Nanny State" intervention

So, in summary, discouraging smoking is good for the economy. Restrictions o the promotion of smoking - including advertising restrictions and plain packaging - are a low cost government intervention to support the economy. That's the sort of thing I thought the Coalition parties believed in.

PS It is worth noting at this point that the Abbott Government had a host of retreats on preventative health initiatives in the budget, notably abolishing the National preventative health advisory body and tearing up the preventative health agreement with the states.

Monday, June 09, 2014

Geo-blocking and all that

A very short blog post about a very simple article on geo-blocking.

The article makes the case for differential pricing in geographic markets by overall willingness to pay (which is facilitated by geo-blocking in software and content sales) on the simple argument that as a consequence the total volume of sales is higher hence reducing the average price over all.

The case is reasonable - and is similar to why it makes sense to have differential speed tiers on the NBN.

Assume I have an upfront cost of $100 I need to recover and $1 per unit marginal cost, and two geographies - one very populace but poorer and another smaller and wealthier.  If I can sell 50 copies in one country for $2 and 10 copies in another for $6 I will be able to recover costs. If I have to charge the one higher price I may be able to sell none in the larger market and need to charge $21 for the 5 customers I can convince to pay that price.

We can see how this actually worked in software by disaggregating markets by users. The release of Office for Home and Student use at a lower price point was far more effective than the earlier strategy of creating Microsoft Works.

That said, the theory is good and does a little to explain the Australian case - because despite what the Coalition Government would tell you this is one of the wealthiest places on earth.

Tuesday, May 20, 2014

Telstra and WiFi

Not terribly surprising news today that Telstra is to invest $100M is building "public" WiFi.

Well, it is not really public WiFi - it is a WiFi network open to all Telstra subscribers. In doing so it is partnering with Fon which advertises it has over 12 million WiFi points. The process is easy - because the network piggy-backs off all their customers private connections and uses duplicate SSID's - one for the customer's own network and one for the WiFi.

Telstra will not use a line if it isn't providing better than 3 Mbps.

This is not a new development - as shown by Fon's base. By partnering with Fon Telstra is opening up access to that network for its customers.

Supratim Adhikari writing for Business Spectator opines that this is all about matching Vodafone - because they are concerned Vodafone's relatively unloaded network can provide a better data experience. However, he also notes the reports from Telsyte in the stalling of data only sales with customers preferring to tether their handset. That causes a problem for Vodafone, because the handset choice is more driven by the availability of voice coverage at the margin than is a data device.

Allie Coyne in itNews notes that Telstra only two years ago closed down an earlier hotspot network. However, as noted that network had been carefully designed to not cannibalise the 3G network.

The whole point of the new play IS to cannibalise the mobile data network - or more correctly to avoid the need for even greater investment in increasing the capacity of the mobile networks. This is not a response to VHA as such, it is just the cheapest response Telstra can make to maintaining network quality.

There is a side benefit that it significantly enhances the data proposition for devices when roaming.

The only surprise with this announcement is how long it took to get here. As I said this isn't new.

The consequence will be the continuing growth of data usage per fixed connection and very little mobile. Just imagine how good that WiFi network would be if the fixed lines people connected to were NBN FTTP links!

Friday, May 16, 2014

Smokin' Joe just doesn't get it

The Federal Budget announced on Tuesday night can be attacked on philosophical grounds - because it does target the weaker members of society and barely touches the privileged. But we can expect that - that is his party's ideological position.

More concerning is that the Treasurer fails to understand how what Keating used to call "the levers" work. His budget is based on an incompetent understanding of how decisions today affect the outcomes tomorrow.

This becomes clearest in his answer to a question without notice in the House on Thursday. In response to a question about the doctor visit fee Mr Hockey said, in part:

Labor has not yet said whether it supports the Medical Research Future Fund, because the only way the Medical Research Future Fund can be created is if there is a co-contribution when people go to visit the doctor. That is because every dollar of savings over the next six years in the health portfolio is going into the Medical Research Future Fund. It is the biggest medical research fund of its kind in the world.

Why we doing this? We are doing this because only through—cure and discovery are we going to ensure that the health system Australians want and deserve over the next 50 years is going to be delivered. That is, finding a cure for cancer, finding a cure for dementia and finding a cure for Alzheimer's, and the Labor Party does not support that. The member for Chifley says that they do not support the medical research that is going to find a cure for cancer, dementia or Alzheimer's. Why?

That is because the Labor Party has never, ever paid it forward. They have never invested for the future. They have never understood that if you really want to build something that is going to improve the quality of life of everyday Australians you have the start investing now.

Medical research doesn't always reduce the health care bill. While some research finds easy to implement cures, or procedures that dramatically reduce periods of hospitalisation, the bulk of them just create new ways to spend money.

The unpalatable truth is that medical research makes the Budget position worse every year. Australia's "ageing population" is not just because of the demographic bubble of the baby boomers - it is that the life expectancy of every Australian is increasing year by year.

The ageing population isn't as much of a challenge if it is a healthy ageing population, but it isn't. The consequence of the combination was highlighted in a recent article in the SMH that started:

Australia needs to rethink how it keeps sick, elderly people alive in hospitals and stop overtreating them at the end of their lives, the outgoing director of St Vincent's Hospital's Intensive Care Unit says.

Bob Wright, AM, a pioneer of intensive care medicine, said older patients are being treated more intensively and expensively than ever before and ''sometimes you wonder whether it's the right thing''.

Medical and legal experts have backed his call for greater discussion of the issue, warning that politicians and doctors are hamstrung by a system geared to save as many lives as possible. New figures show over 65s are the most expensive age group to treat in intensive care, costing more than complicated neonatal cases.

I am not arguing against investing in medical research, I am just saying The Treasurer is wrong to assert that investment in medical research improves the long term budget outlook.

The Treasurer also asserts that Labor never invested in the future at all.

That is also untrue. Firstly Labor invested in the National Broadband Network, and intentionally chose the technology that would meet our needs for broadband now and in the future.

Broadband can and will play a critical role in managing our healthcare and aged care costs in the future. The ABC's Nick Ross has put together a comprehensive list of studies that demonstrate the real and enduring savings that can be made to the Budget through telehealth.

Interestingly the Coalition's 40 page brochure on Infrastructure investment didn't mention communications infrastructure once - and unlike roads, health or education - it actually is a Federal constitutional responsibility. Opposition Leader Bill Shorten highlighted the absence of any reference to "digital infrastructure" in his budget reply.

Thankfully the Budget only reduced the Government equity contribution to NBN Co by less than one billion dollars (less than 3%). If NBN Co management take off their blinkers, look at the costs they identify in the redesigned FTTP scenario and recognise that they have been too pessimistic about revenue they might well use the technology agnostic approach to build an all FTTP network.

But the other thing that can reduce the burden of the health care budget  is an active investment in preventative health.  The Budget went in the other direction and abolished the Australian National Preventative Health Agency and terminated the National Partnership Agreement on Preventative Health.

When you really want to dig into the background of these types of decisions just realise that the people who benefit from the Government's health decisions are vendors - drug companies, medical equipment supplies and private health care providers like Ramsey Health. Good investigative journalists might like to look at which parties these companies contribute to - and whether they are members of the North Sydney Forum.

And Smokin' Joe Hockey needs to be reminded that real investment in the future was what Labor did - not his farce of a budget.

PS I also note that Feros healthcare has just been funded to extend a telehealth service initially trialled over the NBN. The extended service accepts the fact that the NBN is not complete but instead uses 3G and 4G networks. However the announcement also says the long term is still tablets connected using fixed line. This is one of the important but forgotten features of FTTP. A client can be given both the tablet AND a simple WiFi router preconfigured to plug into the second port of the NTD. The telehealth services are not dependent on what actual service the household is paying for, nor are they captive of the contention ratios in CVC and back haul.  

If the Coalition was taking eGovernment, and eServices, seriously they would understand that. 

Sunday, May 11, 2014

The Socialist Objective and All That's Left

The NSW branch of the Fabian Society hosted a useful discussion last week on the question of What is Labor's Objective?

It was useful because an effectively full range of views was available through just three speakers. Chris Bowen advanced the line he advanced in Hearts & Minds, that the party objective should be social-liberalism. In his view the party stands for just two things, economic growth and opportunity for all. These together are supposed to improve the lot of everyone, even the most disadvantaged in our society. Bowen claimed that the socialist objective and its nascent call for government control of industry confused means and ends.

Jenny McAlister gave a far more strident speech, in which she addressed much of the core. In a prepared remark she responded to the idea of equality of opportunity with Anatole Franc's dictum that the law "in its majestic equality...forbids rich and poor alike to sleep under bridges, beg in the streets and steal loaves of bread. Social democrats seek more than just equality of opportunity, they want to see a reduction in the overall level of inequality. As democrats they separate themselves from revolutionary socialists, believing that the outcome can be achieved by democratic means. Indeed they assert that the objective of "democracy" is more than just an objective about political equality, but also socio-economic equality.

There were three main distinctions Jenny drew between social democracy and social liberalism.
1. By retreating to social liberalism we retreat from our commitment to using the power of government to build a stong (and I would add fairer) economy.
2. Social liberalism leads to greater individualism, and hence a retreat from universalism in health and education.
3. Social liberalism doesn't provide the conceptual tools we need to tackle inequality.

Nick Dyrenfurth talked about aspects of the objective which were more than just "economic", what it means to also value the "social." This includes a direct reference to the other half of Labor's history. It wasn't just action for equality, it was co-operative action for equality.

I'll confess that I think the discussion of the objective gets confused because it needs to follow-on from the discussion of the values. Bill Shorten said in his speech last month on modernising the party that he would seek a review of Chapter One of the National Platform that outlines Labor's Values. A statement of values is where it gets hard - it is where you have to already start making choices - or else you just add so much that they become meaningless, as Labor's now have.

At the same time the focus is now on the claims to be socialist, even the legitimacy of the social democratic tradition, or of democracy itself. For these three I rely most immediately on that paragon of politically neutral reporting - The Australian.

In an editorial of 8 May the Oz opined on the socialist objective. I asserted that Bill Shorten thinks it should go, that Paul Keating asserts it confuses "ends and means" and concludes:
Labor’s challenge is to once again become an advocate for economic growth and not simply to trumpet the post-materialist agenda of the inner-city elites. Fundamental to this is rebuilding relations with business and regaining economic credibility. Cheap shots at business leaders and attacks on the Commission of Audit may play well impress backbench MPs but to voters it shows that Labor still has not learnt the lessons of its election defeat.
There is so much in this that sits outside the framework of this discussion, however, if it is the case that the form of words we use to describe the true objective allows the objective to be misrepresented, then it should be changed.

Of more of a concern was a column by Greg Sheridan that argued that the experience of Europe was that there is a point at which social democracy makes so many people dependent on the State that no reform of State finances is ever possible. That this both misrepresents the objective and the means pales into insignificance compared to what it says of the neoliberal and public choice theory of voting behaviour. This point was made only a few weeks ago by demographer Bernard Salt (I think that was who it was but I can't find the article), who was mouthing something similar, a general claim that the democratic project was now doomed because everyone was only in it for what they could get.

The even more extreme view was mounted by Henry Ergas in a Libertarian Society talk shown on A-PAC. His view was that the tax free threshold should be abolished because it was important that every citizen understand that Government services are only delivered by taxes. He perhaps forgets that the GST taxes everyone, even those on welfare. He made a strange claim that in fact the GST and income tax were effectively the same...because they tax the individual.
In this context it is critical that the Labor Party is in a position to be able to coherently state its strong egalitarian purpose and the role Government plays in that. A rewrite of the objective is called for - but it should be remembered that it is a lot more than just the first point. It is reproduced in full below.

My suggestion for a shorter version that gets to the heart of the matter is as follows:

2. The Australian Labor Party is a social democratic party and has the objective of Government management of the economy to achieve the political and social values of equality, democracy, liberty and social cooperation. In particular the Australian Labor Party stands for:
(a) redistribution of political and economic power so that all members of society have the opportunity 
to participate in the shaping and control of the institutions and relationships which determine their 
(b) establishment and development of public enterprises, based upon Government and other forms 
of social ownership, in appropriate sectors of the economy, especially natural monopolies and those delivering critical social services
(c) management of Australian natural resources for the benefit of all Australians
(d) maintenance of and support for a competitive non-monopolistic private sector
(e) the right to own private property
(f) recognition and encouragement of the right of labour to organise for the protection and 
advancement of its interests
(g) the application of democracy in industry to increase the opportunities for people to work in 
satisfying, healthy and humane conditions; and to participate in and to increase their control over 
the decision making processes affecting them
(h) the restoration and maintenance of full employment
(i) the abolition of poverty, and the achievement of greater equality in the distribution of income, 
wealth and opportunity
(j) social justice and equality for individuals, the family and all social units, and the elimination of 
exploitation in the home
(k) equal access and rights to employment, education, information, technology, housing, health and 
welfare services, cultural and leisure activities and the law
(l) reform of the Australian Constitution and other political institutions to ensure that they reflect 
the will of the majority of Australian citizens and the existence of Australia as an independent 
(m) recognition and protection of fundamental political and civil rights, including freedom of 
expression, the press, assembly, association, conscience and religion; the right to privacy; the 
protection of the individual from oppression by the state; and democratic reform of the Australian 
legal system
(n) the development of a democratic communications system, as an integral part of a free society, to 
which all citizens have opportunities for access
(o) elimination of discrimination and exploitation on the grounds of class, race, sex, sexuality, 
religion, political affiliation, national origin, citizenship, age, disability, regional location, economic 
or household status
(p) recognition of the prior ownership of Australian land by Aborigines and Islanders; recognition 
of their special and essential relationship with the land as the basis of their culture; and a 
commitment to the return of established traditional lands to the ownership of Aboriginal and 
Islander communities
(q) recognition and encouragement of diversity of cultural expression and lifestyle within the 
Australian community
(r) the use, conservation and enhancement of Australia’s natural resources and environment so that 
the community’s total quality of life, both now and into the future, is maintained and improved
(s) recognition of the need to work towards achieving ecologically sustainable development
(t) maintenance of world peace; an independent Australian position in world affairs; the recognition 
of the right of all nations to self determination and independence; regional and international 
agreement for arms control and disarmament; the provision of economic and social aid to 
developing nations; a commitment to resolve international conflicts through the UN; and a 
recognition of the inalienable right of all people to liberty, equality, democracy and social justice
(u) recognition of the right of citizens to work for progressive changes consistent with the broad 

principles of democratic socialism.

The Current Objective
2. The Australian Labor Party is a democratic socialist party and has the objective of the democratic 
socialisation of industry, production, distribution and exchange, to the extent necessary to eliminate 
exploitation and other anti-social features in these fields.
3 To achieve the political and social values of equality, democracy, liberty and social cooperation 
inherent in this objective, the Australian Labor Party stands for:
(a) redistribution of political and economic power so that all members of society have the opportunity 
to participate in the shaping and control of the institutions and relationships which determine their 
(b) establishment and development of public enterprises, based upon federal, state and other forms 
of social ownership, in appropriate sectors of the economy
(c) democratic control and strategic social ownership of Australian natural resources for the benefit 
of all Australians
(d) maintenance of and support for a competitive non-monopolistic private sector, including small 
business and farming, controlled and owned by Australians, operating within clear social 
guidelines and objectives
(e) the right to own private property
(f) recognition and encouragement of the right of labour to organise for the protection and 
advancement of its interests
(g) the application of democracy in industry to increase the opportunities for people to work in 
satisfying, healthy and humane conditions; and to participate in and to increase their control over 
the decision making processes affecting them
(h) the promotion of socially appropriate technology and the monitoring of its introduction to ensure 
that the needs and interests of labour, as well as the requirements of competitive industry and 

consumer demand, are taken into consideration
(i) the restoration and maintenance of full employment
(j) the abolition of poverty, and the achievement of greater equality in the distribution of income, 
wealth and opportunity
(k) social justice and equality for individuals, the family and all social units, and the elimination of 
exploitation in the home
(l) equal access and rights to employment, education, information, technology, housing, health and 
welfare services, cultural and leisure activities and the law
(m) reform of the Australian Constitution and other political institutions to ensure that they reflect 
the will of the majority of Australian citizens and the existence of Australia as an independent 
(n) recognition and protection of fundamental political and civil rights, including freedom of 
expression, the press, assembly, association, conscience and religion; the right to privacy; the 
protection of the individual from oppression by the state; and democratic reform of the Australian 
legal system
(o) the development of a democratic communications system, as an integral part of a free society, to 
which all citizens have opportunities for free access
(p) elimination of discrimination and exploitation on the grounds of class, race, sex, sexuality, 
religion, political affiliation, national origin, citizenship, age, disability, regional location, economic 
or household status
(q) recognition of the prior ownership of Australian land by Aborigines and Islanders; recognition 
of their special and essential relationship with the land as the basis of their culture; and a 
commitment to the return of established traditional lands to the ownership of Aboriginal and 
Islander communities
(r) recognition and encouragement of diversity of cultural expression and lifestyle within the 
Australian community
(s) the use, conservation and enhancement of Australia’s natural resources and environment so that 
the community’s total quality of life, both now and into the future, is maintained and improved
(t) recognition of the need to work towards achieving ecologically sustainable development
(u) maintenance of world peace; an independent Australian position in world affairs; the recognition 
of the right of all nations to self determination and independence; regional and international 
agreement for arms control and disarmament; the provision of economic and social aid to 
developing nations; a commitment to resolve international conflicts through the UN; and a 
recognition of the inalienable right of all people to liberty, equality, democracy and social justice
(v) commitment to and participation in the international democratic socialist movement as 
represented by the Socialist International
(w) recognition of the right of citizens to work for progressive changes consistent with the broad 

principles of democratic socialism.

Friday, May 02, 2014

The Commission of Audit, the States and the Right

Let me be clear, I have only read a very little of the National Commission of Audit report. Like most people, however, I have been bombarded with news reports.

The immediate impression is that the report contains all the recommendations one would expect from the typically shallow analysis provided by a cadre trained in "modern economics", which is just classical marginal economics tarted up a bit. But in part this is because that was the mission given to the Commission.

The Terrms of Reference specify that:
It is therefore timely that there should be another full-scale review of the activities of the Commonwealth government to: ;
– ensure taxpayers are receiving value-for-money from each dollar spent;
– eliminate wasteful spending;
– identify areas of unnecessary duplication between the activities of the Commonwealth and other levels of government;
– identify areas or programs where Commonwealth involvement is inappropriate, no longer needed, or blurs lines of accountability; and
– improve the overall efficiency and effectiveness with which government services and policy advice are delivered.

So addressing vertical fiscal imbalance and possible "duplication" of activities was a core function of the report.

The Terms of Reference also specify that:
The Commission should also be guided in its work by the principles that:
– government should have respect for taxpayers in the care with which it spends every dollar of revenue;
– government should do for people what they cannot do, or cannot do efficiently, for themselves, but no more; and
– government should live within its means.

As a consequence, the ideas in the report that are all about shrinking Government activity are part of the requirements of the report, not necessarily conclusions. Specifically the Commission was excluded from having any consideration of whether additional permanent revenue was an appropriate conclusion.

Prime Minister Abbott was even more succinct in his framing in his address in April 2014 to the Sydney Institute, where he said:
Every time a government spends people’s money for them, it limits their own freedom; hence the famous dictum that government should do what the people cannot do for themselves, and no more. (see note)

In addressing the question of "unnecessary duplication between the activities of the Commonwealth and other levels of government", the Commission has proposed two key principles that should apply to Commonwealth-State relations. These are:
• Subsidiarity - As far as practicable, policy and service delivery should be devolved to the level of government closest to the ultimate clients, to allow programmes to be tailored to meet community needs. Governments should operate at their natural levels (policy oversight for national issues should go to the Commonwealth and regional and local issues should go to the State governments).
• Sovereignty – As far as practicable, each level of government should be sovereign in its own sphere. When reviewing roles and responsibilities, government activities should be allocated to one level of government only, in order to provide greater clarity and accountability.

The recommendations of the Commission on devolving responsibilities and changing funding to untied grants and even increasing the States own taxing powers are consistent with these principles - if it is accepted that the current delineation of responsibilities in a three tier system are appropriate.

There are a number of reasons why the issues should be considered in a wider view.

1. The first and most obvious is that there are scale efficiencies inherent in many policy decisions in service delivery. Why instead of nine Governments (the Federal and the eight State and Territory Governments) grappling with the same issues does it make sense to have only eight Governments doing it, rather than one. This becomes particularly relevant when the contrasts between the capabilities in NSW and Victoria are compared to Tasmania, the ACT and NT.

2. The principle of the government that is "closest" to the ultimate clients is the flip side of the scale efficiencies. How significantly closer is the NSW Government, that administers 40% of the nation, or even Victoria at about 30%, to the "clients" than the Federal Government? The large States have historically experimented with issues like regional Health Boards to deal with their own remoteness. Would not a devolution of administrative functions to a democratic level below these State Governments not achieve better outcomes?

3. The existing State boundaries continue to limit the operation of the national economy. Cross border professional recognition has been a challenge. So too has been the development of innovative technology based service delivery models that can't be accredited, or funded, if the service cross State boundaries.

If the discussion on Government efficiency was not blinkered by a bias towards "small government" and existing constitutional arrangements, the correct response would be to try to develop a twenty or thirty year program that dealt permanently with the structure of Government.

It is one hundred and thirteen years since the colonies agreed to federate without giving up their sovereignty. It is a credit to the nation and a benefit of its geography that this is one of the world's longest continuing democracies. To refresh its structure does not invalidate this continuity.

Reform to the structure of the tiers of Government is not new. Bob Hawke advocated it in the first of his 1979 Boyer Lectures "Resolution of Conflict". He advocated it again at Woodford in December 2013.

A 2010 Newspoll reported that 4 out of 10 Australians supported the abolition of State Governments as they were the least effective level of Government. (The Australian article asserted this was due to voter dissatisfaction with various State Labor Governments. A later Newspoll in 2012 found a dramatic shift from 2008 to 2012 in the faith in the Federal Government - which the Oz was also keen to blame on Labor - but faith in the States had declined further and was still below the Federal Government ).

There are at least two very useful resources on the issue of the future of the States available online. The Abolish the States Collective and a political party called No State Governments.

The Commission of Audit report notes that there is a commitment for a White Paper on "Reform of the Federation". It is to be hoped that this White Paper is prepared with a remit to consider a wider agenda than that provided to the National Commission of Audit.

Note: A Canberra Times article sourced the so-called "dictum" as follows:
The words seem to have been lifted from, of all places, a speech by President Barack Obama, in which he summarised and distorted the views of Abraham Lincoln. Lincoln said: ''The legitimate object of government is to do for a community of people whatever they need to have done but cannot do at all or cannot do so well for themselves.''

This is an apparent reference to President Obama's 2012 State of the Union address. That annotated version of the address includes the correct original Lincoln quote as an annotation.

Commentators quickly noted that Obama was misquoting Lincoln - even describing it as deliberately misquoting. However, this critic thought that Obama was misquoting it to justify a bigger role for Government than Lincoln accepted. I'm not so sure.

The original is an 1854 piece by Lincoln The Nature and Objects of Government, with Special Reference to Slavery. The relevant longer quotes are:
Government is a combination of the people of a country to effect certain objects by joint effort. The best framed and best administered governments are necessarily expensive; while by errors in frame and maladministration most of them are more onerous than they need be, and some of them very oppressive.
The legitimate object of government is "to do for the people what needs to be done, but which they can not, by individual effort, do at all, or do so well, for themselves. There are many such things—some of them exist independently of the injustice in the world. Making and maintaining roads, bridges, and the like; providing for the helpless young and afflicted; common schools; and disposing of deceased men's property, are instances.
The legitimate object of government is to do for a community of people whatever they need to have done, but cannot do at all, or cannot so well do, for themselves, in their separate and individual capacities. In all that the people can individually do as well for themselves, government ought not to interfere. The desirable things which the individuals of a people cannot do, or cannot well do, for themselves, fall into two classes: those which have relation to wrongs, and those which have not. Each of these branches off into an infinite variety of subdivisions.
The first—that in relation to wrongs—embraces all crimes, misdemeanors, and non-performance of contracts. The other embraces all which, in its nature, and without wrong, requires combined action, as public roads and highways, public schools, charities, pauperism, orphanage,estates of the deceased, and the machinery of government itself.
From this it appears that if all men were just, there still would be some, though not so much, need of government.
It is worthwhile to note that Lincoln made these comments leading up to a statement on slavery, where he wrote:
Equality in society alike beats inequality, whether the latter be of the British aristocratic sort or of the domestic slavery sort. We know Southern men declare that their slaves are better off than hired laborers among us. How little they know whereof they speak! There is no permanent class of hired laborers amongst us. Twenty-five years ago I was a hired laborer. The hired laborer of yesterday labors on his own account to-day, and will hire others to labor for him to-morrow. Advancement—improvement in condition—is the order of things in a society of equals. As labor is the common burden of our race, so the effort of some to shift their share of the burden onto the shoulders of others is the great durable curse of the race. Originally a curse for transgression upon the whole race, when, as by slavery, it is concentrated on a part only, it becomes the double-refined curse of God upon his creatures....
Most governments have been based, practically, on the denial of the equal rights of men, as I have, in part, stated them; ours began by affirming those rights. They said, some men are too ignorant and vicious to share in government. Possibly so, said we; and, by your system, you would always keep them ignorant and vicious. We proposed to give all a chance; and we expected the weak to grow stronger, the ignorant wiser, and all better and happier together.
We made the experiment, and the fruit is before us. Look at it, think of it. Look at it in its aggregate grandeur, of extent of country, and numbers of population—of ship, and steamboat, and railroad.

It can be very easy to mistake Lincoln's sentiments as being something akin to neo-liberal, a mistake that can be made because he was a Republican President.
But in the application of his comments to the present case it is worth noting that Lincoln was making the case for Government action on slavery. As President he took the view that the Federal Government should outlaw slavery in the new territories being opened up, and the reaction to this by the South resulted in a Civil War that ultimately ended slavery and was as much a war about the relative positions of State and Federal Governments as it was about the specific issue of slavery.

Wednesday, April 16, 2014

The TAF - a brief history

In his speech to the CommsDay Summit 2014 Telstra's Dr Tony Warren said he'd like to see an industry led co-operative process to work out more of the processes for migration to the NBN. 

In part he said:

All of us - regulators, NBN Co and industry - have so far not delivered a consistently positive experience when it comes to switching to the NBN. Telstra offers NBN fibre services in every available market. Across all these markets, end users frequently experience delays and disappointment when they try to switch to the fibre network.

The problems will be well known to many people in this room – including too many premises not actually being fibre ready, connection delays and incomplete product sets. Retailers have encountered their own issues as well. To their credit, NBN Co has improved their performance recently in many areas around the connection experience. However, their efforts have not been helped by the fact that there is currently no single framework with clear responsibilities as people migrate from one network to another.

 Migration necessarily involves multiple parties – only Telstra can disconnect customers from our network; only NBN Co can connect people to theirs; only RSPs can deal directly with their customers; and only the service providers of medical alarms and the like can be responsible for making sure their devices work on the new network...

To bring all these parties together in a more efficient and effective way, we the industry, need to refocus the end-to-end migration process at improving the customer’s experience. This will mean a shift away from traditional regulatory structures. Migration issues are overwhelmingly operational or customer service issues. As such, our view is that industry participants led by the Comms Alliance are best placed to drive the solutions and improve operational efficiency. 

A questioner (Phil Dobbie) asked why an industry process was needed - wasn't migration an NBN issue. In reply , Dr Warren said that he had in mind something like the TAF - but he suggested that only David Havyatt (i.e. your blogger) would be able to explain that.

However, Susan Huggett, now NBN Co's GM of Industry Engagement, was also in the room and knows a lot about the TAF too.

But since the issue has come up I might explain a bit about what the TAF was and did - and of its demise.

The 1997 Telecommunications Act was drafted with an assumption that as multiple parties built infrastructure an active market would develop in wholesale services. It also was based around the principle that industry should be given the opportunity to work out its own issues beore regulators stepped in (the Act's stated objective of maximising self-regulation).

The provision for Industry Codes is relatively well understood - but not necessarily the scope of those Codes. In its original guise as the Australian Communications Industry Forum (ACIF), CommsAlliance wrote codes that covered consumer issues, network issues, cabling issues and operational issues. While most public focus has been on the consumer protection ones, it was the operational and network codes (and associated documents) that had the most significance for market development. For example, mobile number portability comes about by the operation of both a network and operational code. That multiple operators can all operate DSLAMs from one exchange is due to the ULLS Network Deployment Rules.

Separately the Act provided for a Telecommunications Access Forum (the TAF) that worked as part of the declared services regime. It could recommend declaration of services or write standard terms and conditions of access.  I was at about the 4th meeting of the TAF representing AUSTAR (whose subsidiary Windytide had a carrier licence for a small HFC network in Darwin). I returned in 1998 when I joined Hutchinson.

The TAF was mostly a great battleground between Telstra and the rest of industry. The standard terms and conditions for the deemed declared services (those that were declared by the 1997 Act because they already were supplied to Optus and Vodafone) were relatively quickly settled.

The next great TAF issue was over whether the service description for mobile terminating and originating services should be amended to include CDMA networks (the deemed service declaration referred only to GSM). I attended a meeting in late 1999 representing Hutch and argued vigorously against the variation - we didn't think we needed regulation for access to our network. Susan represented Optus and argued vigorously for the variation to capture Hutch's and Telstra's CDMA networks.

Before the next meeting two things happened. I moved from Hutch to AAPT and the ACCC published a paper by Josh Gans and Stephen King that effectively argued the price for mobile terminating access should be zero.

At the first meeting in 2000 then I was arguing completely the opposite case - CDMA should be included. Susan however was now also arguing a completely opposite case - Optus now wanted no regulation of any mobile services. It was, to say the least, a very funny meeting.

The next TAF task was trying to write standard terms and conditions for ULLS, and to consider declaration of a Line Sharing Service. The latter simply didn't progress and it took a few more years for the ACCC to declare it. he ULLS standard terms and conditions were however largely agreed but a few outstanding issues had to in the end be resolved by the ACCC.  The funniest part of these was a battle about what rights parties had if issued with a competition notice. Telstra's representative Mitchell Landrigan implored us to realise the clause was reciprocal and said we should think about how it would help us if we were issued with a competition notice. My reply was "AAPT dreams of having sufficient market power that it could be issued with a competition notice."

The most challenging part of writing the ULLS spec was the question of migration from State A to State B deployment - which was the way we described exchange based DSLAMs and a future hypothetical node based DSLAM. This was a task that we tried to co-ordinate with the technical group - and ultimately failed. The issue was that if both State A and B ran together the DSLAM at the node would have to be powered back to an extent that it largely matched the exchange based. And there was little incentive to resolve it in 2000 because it would only have been Telstra at the node/pillar.

While the TAF never finalised a recommendation on declaration nor indeed a standard terms and conditions, it actually very valuably reduced the set of decisions/determinations left to the ACCC to make.

However, during the Productivity Commission review of the operation of Parts XIB and XIC everyone other than Telstra and AAPT argued the TAF was pointless and should be abolished. When the PC ultimately made that recommendation Telstra's rep (Mitchell) and I pointed out to our colleagues on the TAF that there was no legislative requirement that it exist and it could be dissolved by its members. So on a resolution moved by AAPT and Telstra it was decided to wind up the organisation. However, I think technically it never met after that day but the industry was so captive of the idea of regulation that it waited till the legislation was changed before the TAF formally ceased.

It is somewhat strange in a period where the industry is again considering regulatory structures - both through red tape reduction and the Vertigan review - to hear the TAF being referred to. It is less strange when I realise that once NBN Co was formally established it decided to walk away from the multilateral process started by Gary McLaren with CommsAlliance that gave the industry a head start on the NBN architecture. Equally NBN Co thought the way to develop an access agreement was to negotiate it with the ACCC rather than industry. It was a hoot to hear the early NBN Co presentations about "deep dives" with access seekers. Only later did they realise the value of a multilateral process through the Product Development Forum.

There is now a separate concern that the PDF is becoming a substitute for public policy discussion. The reports today that proposed product specs for the FTTN products will not guarantee upload speeds beyond 1 Mbps are cause for concern. This is fundamentally a policy issue - as Microsoft CEO Pip Marlow has noted upload speeds are critical for utilisation of cloud services. This should not be a discussion conducted in a private forum.

Friday, April 04, 2014

Nothing to see here - move on please


Troy Bramston's big story under the heading "Labor to loosen its union links" was nothing more than a repeat of what various Labor bods had said all week - that the union links would be "loosened" by no longer requiring members to be unionists.

I don't know why anyone thinks this is a big reform - because it doesn't already apply. And even if some Branch Secretary somewhere is insisting on it, under current rules in NSW you can join any branch in your state electorate, or you can join the "Central Policy Branch". 

Evidently Mr Shorten is going to announce "his plans" in Melbourne on Monday.

Apart from that big "news" the Bramston column is otherwise a news report of an Op Ed that appears in the same paper - by NSW General Secretary Jamie Clements.

Oh and one other item - the suggestion that delegates will be directly elected to national conference, that the party is considering "centralising membership and making membership rules uniform".  Which is al pointless and meaningless because control of the party happens at State Conferences, not National ones. And the party structure is technically a Federal one - the State organisations and the national organisation have their own rules.

Now it might indeed be easier to achieve real reform were the party to centralise, but I don't see that happening.

The biggest joke of the lot was in the Clements column where he rejected the Stephen Loosley idea of conference decisions being non-binding. He wrote:

"I've always believed Labor conferences create a good litmus test. They provide Labor leaders with a forum to argue their case for reform. To convince the public, our leaders hone their arguments before representatives of Labor's rank and file and affiliated union members. If you can't convince your Labor colleagues, you won't convince the voters."

This is just outright fantasy. The "key reforms" he claims Hawke and Keating took to conference first were actually narrow pieces over privatisation and uranium mining. Nothing like it has happened at a NSW Conference over recent years - except the rolling of a Premier. The leader only appears for the orchestrated triumphal entry after the mandatory video-clip to a rapturous standing-ovation. Every vote is decided before conference starts on the block votes of the aligned unions.

It is hard to believe that there has ever been a person whose view was changed by the debate at conference, and even less whose vote would have changed.

So be ready - as I predicted yesterday we are going to have another round of leader announced "reforms" around which the membership must coalesce.

Footnote: Today's Australian was also dominated by the story of the ALP number one position holder in the WA Senate by-election, Joe Bullock, giving a speech that revealed he was not exactly in tune with modern Labor. I don't recall him from University but his claim that he was the one to convince Abbott to join the Liberals was part of the same David Marr story that revealed the punch.

Thursday, April 03, 2014

The stirrings of Labor Reform - yet again.

Interesting tweet by Troy Bramston tonight
This follows a week of media discussion of reform - starting with three separate articles in The Australian  on Monday.

The first picked up some  comments from Tanya Plibersek on Sunday television which followed on from an earlier discussion about the rules where Bill Shorten had suggested weakening the union ties - by no longer requiring party members to be members of a union.

The second was a contribution from former NSW General Secretary and Senator Stephen Loosley.  After a discussion about Tony Blair's UK reform - notably the jettisoning of the Rule 4 nationalisation platform - he goes on to suggest Shorten needs to find something similarly iconic. He rejects the idea that this might come by reviewing the "socialist objective" because "it is so old, it now has mould growing on it".

The genius recommendation is to make a rule that the decisions of conferences are only advisory and no longer binding on the parliamentary parties. This we are told "At a single stroke it would eliminate any claim that Parliamentary Labor is subject to the dictates of trade union affiliates." The funny thing is though it wasn't following a decision of conference that Paul Howes got his head all over TV taking credit for the knifing of KRudd.

The third contribution was an editorial that smeared the ALP for the Williamson and Thompson convictions and called on Labor to "think carefully about its future ties to the union movement." It also called on Labor to throw its support behind the royal commission into union corruption.

No one unfortunately pointed out to the Oz that the ordinary legal processes had already worked just fine, and that what Labor had called for was a police Strike Force - which would be more likely to result in prosecutions than a Royal Commission.

There have been further dribbles since. The Victorian Fabians had a forum on the issue, based on which Latika Burke interviewed Andrew Giles.
The speech Giles gave to the Fabians was thin on specifics. In the interview he defended the union association and spoke very generally about the need to create extra ways for people to "have a say" in the party. He really is trying to encourage discussion leading up to the National Conference in 2015. But everyone is crazy if they think Bill Shorten's address to the National Policy Forum provided much insight.

My own views are very straight forward - the most essential reform is breaking union control of conferences and party structures. Not all unions are affiliated, so when people talk about there being 2 million trade unionists, remember that only half of those or less belong to affiliated unions (or more strictly affiliated divisions of unions). But really it is the union movement that has as much to gain by breaking the ties as it is the ALP.

But the real risk we face now is a re-run of reform under Crean and Gillard. The leader will make a pronouncement, that will not have been consulted on widely. Very rapidly the party power structure will enforce a position that it is more important to appear to be unified than it is to have a meaningful debate. As a consequence "party reform" will rapidly be defined as doing whatever Bill says.

I will hold the rest of my fire until I see what pronouncements are made tomorrow - or at least what has been dropped by Shorten's office to Bramston. This may be more of a kite flying exercise, a trial run to see the reaction to the proposals when written up by Bramston as what Shorten will announce.

Monday, March 31, 2014

The sexism of Tony Abbott - and the anachronism of Letters Patent

In all the discussion about the reintroduction of "knights and dames" to the Order of Australia, the inherent sexism has been ignored.

When a fella gets awarded a knighthood his wife gets to call herself Lady. Hence Sir Frank and Lady Packer. When a person of the other gender gets the equivalent honour they are called a Dame - but their partner remains just plain Mister.

So there is rampant sexism here - not just in having different titles - but in the implications for the partner of the awardee.

It makes one wonder why some other form of gender neutral honorific couldn't have been chosen by the Prime Minister. The honorific many of us are familiar with is "the Honourable". As Peter Hartcher reported today Quentin Bryce having no other title (being neither a former politician, judge or soldier) would have reverted to being just plain "Ms." But that was fixed last year, the Honourable Quentin Bryce was staying the Honourable Quentin Bryce.

It could be that the Prime Minister thought something better than "the Honourable" was called for as lots of politicians get called "the Honourable" and it has confusingly different application around Australia.

The alternate possibility was to revive and redefine the term "the Right Honourable". This historically refers to members of the Privy Council, but it would seem to be an appropriate title to be given for life to the people the Prime Minister proposes to give the knighthoods and dameships (?) to.

But here is where it ALL gets interesting. We see the reference to the May Gazette being about a decision of the Queen to bestow the title "the Honourable". We see also that knights and dames snuck back in by "letters patent" by Her Majesty.

Isn't the Order of Australia is an Australian honours system, notably NOT an Imperial honours system. It turns out that it is not "imperial" in the sense that OBE's and GBE's were an honours system of the empire (created in World War I), and there are a few others that are the personal gift of the queen. That's why the Order of Australia website says "Imperial honours (except for a few which are in the personal gift of the Queen) are no longer awarded to Australians."

See it turns out that the whole of the Order of Australia is created by Letters Patent, first issued by the Queen on the advice of Gough as PM in 1975.

So just to be clear, Troy Bramston gets it wrong when he thinks the decision to create knights and dames deviates from the Queens view in 1990 that Australia should stick to its Australian honours system, with her as sovereign. We still are, she just changed the rules on the advice of her Prime Minister. She would not  accept a recommendation from a State Governor/Premier to make an award in the Order of the British Empire, though the letters patent for that probably still apply.

So what the are these "Letters Patent". That old reliable Wikipedia calls them "a form of open or public proclamation and a vestigial exercise of extra-parliamentary power by a monarch or president. Prior to the establishment of parliament, the monarch ruled absolutely by the issuing of his personal written orders, open or closed."

Here it is important to understand sequence. In 1975 using Letters Patent by the Queen to establish the Order of Australia made sense. It makes absolutely no sense following the passage of the Australia Act which aimed to cut direct governance powers from the UK.

Bill Shorten last week made clear that the ALP has opposed Imperial Honours from 1918 - the year after the Order of the British Empire was created.  It was the ALP that adopted the Statue of Westminster in 1942, that introduced the Order of Australia in 1975 and passed the Australia Act in 1986.  It is time the Platform was updated to also pass legislation removing Her Majesty's power to issue Letters Patent with respect to Australia, and that the monarch of Australia not be the "sovereign" of the Order of Australia and instead the people of Australia represented by the Parliament and the Governor-General be the creators of the honour. Similarly the decisions about the use of the honorific "the Honourable" and 'the Right Honourable" should belong to Australia's parliament not our absentee monarch.

In a twittersation with Troy he has disputed my assertion that he is wrong in his article. I haven't seen the original 1990 letter but there are three points in the article made about it.

The first is "it is more appropriate at this stage in Australia’s development that Australian citizens should be recognised exclusively by an Australian system of honours, of which she herself is proud to be sovereign" - this proposition still holds as the knights and dames to be awarded are within the Australian honours system of which the Queen is sovereign.

The second is "The Queen suggested Australia 'honour its citizens exclusively within its own system'." This also still holds as the knights and dames are awards within the Order of Australia.

The third is "Moreover, she indicated she no longer thought it appropriate to ­approve Australian honours, which Abbott has reinstated." This is the only point on which it is arguable that the Abbott decision formally deviates from the Queen's view. This is because the award of knighthoods will be made by the Queen on recommendation of the Prime Minister.

In my original post I indicated that I thought Bramston wrong to claim about the use of the Australian honours system exclusively. That is the claim he leads with and it is wrong to assert it.

Bramston is technically right on the assertion that the Queen's view was that she should have no role in determining Australian honours. But really my point is that if we were serious the legislative basis for the Australian Honours system would not be Letters Patent.

It is also important to remember the context of the Queen's advice - which was about State Governments making recommendation for knighthoods under the Order of the British Empire and this was the Queen's plea for there to only be the Order of Australia. It wasn't specifically a commentary on the award of knights and dames within the Order of Australia, It is impossible to conclude from the letter that "While Abbott has, with the Queen’s consent, reinstated knights and dames within the Order of Australia, she clearly saw the titular honours of knight and dame as, well, passé." Were she to do so she wouldn't be doing it in the UK, New Zealand and other places.

Wednesday, February 12, 2014

Tony Abbott's Garma Festival Speech

That Tony Abbott was going to spend his first week as Prime Minister on country in East Arnhem land is one of the great "claims" that endures fro the election campaign.

His actual Garma Festival Speech did not say this. At about 20:27 in the YouTube clip of the speech he says he will as PM spend one week a year on country, and the context of the subsequent statement is clear that this reference to "first week" was not "first week as PM" but "first of my annual weeks."

 In researching this I found this article which talks about the extent to which the promise was originally reported. It is astonishing the extent to which the story was allowed to run given how clearly it can be constructed that Mr Abbott did not mean his first week.

This isn't a failure of Mr Abbott it is a failure of those around him.

The AFR begs the question

The AFR opinion pages (behind paywall) have two comments that refer to the changing shape of the Australian economy.

The editorial The future must let go of the past talks at length about the need to accept the changing nature of our industry, and not to try to retain existing industries.

Unfortunately the editorial is devoid of any commentary on what the future looks like, only that the past must be let go.

On the facing page the heading of the opinion piece How to pick the industries that suit us best initially ofers hope.  It doesn't however, tell us what those industries are, but it has a far more informed policy prescription than anything else.

The writer, Bill Carmichael, helpfully reminds us of the difference between what economists call productive efficiency and allocative efficiency. In management babble this is the difference between doing things right and doing the right things.

Carmichael points out that the real advances in our economy in the 80s and 90s came not from productive efficiency but from allocative efficiency. It is also instructive to note that in the 90s competition policy was embraced by all Australian business sectors, offering by criticising each other. Everyone complained about how lack of competition in banking, transport, energy and telecommunications was restricting their ability to perform. Today that same business community only talks about productive efficiency and in particular wages and employment costs.

He notes that the industries that are closing have realised that no level of improvement in their productivity would have made them competitive.

He concludes that "Unless policymakers acknowledge the dominant contribution improved allocative efficiency has made to the performance of the economy, they risk creating a large and growing constituency for unproductive reform." 

Against which I would note that the slowing of Australian productivity improvement coincided with the creation of the Productivity Commission.

Somewhere in this whole discussion one would hope that the importance of high speed broadband infrastructure might feature.  But that seems to be beyond the AFR.

Tuesday, February 04, 2014

Contrasting views in The Australian

Two items in The Australian IT worthy of comment.

The first is a reported claim by John Cioffi that fibre-to-the-home is slower than VDSL because it is a shared infrastructure and hence gets "clogged" when everyone is using it. This is firstly an incorrect description of how GPON works as I understand it. The fibre is split optically and the amount of committed AVC sold is less than the sum of the capacity of the fibre.  NBN Co sells a guaranteed AVC rate.

That doesn't mean that the experience reported might not occur of getting a slower speed once a service is converted to FttH, because there is an element of shared capacity called the CVC that connects a FAN to a POI.  That is contended, but in the NBN Co model RSPs make their own decision about what contention they want.

But as iiNet and NBN Co have reported a consequence of providing bigger pipes is that consumers use it more. If an RSP was to migrate its customers from DSL to FTTH but use its previous contention ratios it is entirely possible that light users would see a slowing down.  But as I said that is in the control of the RSP. 

This of course isn't the case with HFC where the connection provider (assume NBN Co) can't guarantee the access speed of the AVC.  And HFC will be 30% of the Coalition Broadband Network.

Cioffi also reportedly claims neighbours can spy on each other's traffic with the "right equipment." As the data is encrypted it is more than equipment you need, it is the ability to crack the encryption.  If Cioffi can do that he is in the wrong business.  I understand it uses Advanced Encryption Standard, which is what the NSA approves for US Government. It is unknown (as I understand it) if this is one of the encryption standards "cracked" by the NSA.

So the story can be put in the bucket of reporting of unsubstantiated claims - just like the ABC and asylum seeker burns.  But don't tell The Australian that!

The other story was about how game developers Secret Labs' in Tasmania were able to use the NBN to grow their business. Secret Labs wrote about theie experience on their own website. Their own more detailed comment is;

Realistically, we don't care what technology the remaining NBN rollout is delivered by, but we don't believe that the plan currently suggested by the coalition government can deliver an NBN that will truly serve Australia, and offer the same opportunities and capabilities to Australia, the way that FTTP has changed our business in the few short weeks we've been connected. Disturbingly, the majority of the published material from the current government regarding their NBN plans does not mention upload speed at all – upload is the most transformative aspect of FTTP for us.

This is probably reflective of most of Australia. People don't really care what the technology is, but they are concerned if the replacement can't at least provide the 100 Mbps down and 40 Mbps up.