Friday, February 26, 2010

Communications Policy

The National Broadband Network is just one facet of communications policy, but at times you'd be forgiven for thinking it is the only one.

The Australian reported last week that the NBN itself was in a mire, and that Telstra was eyeing off the prospect of again playing hard ball. That is, thinking the story is only about them deciding not to finalise negotiations to force more concessions from the Government.

In the same rag today Mark Day wonders whether our ABC needs to have its role redefined. There has been some angst both about the ABC move to a 24/7 news channel and the ABC funding of the so-called "regional hubs".

The ABC is a strange model, given that we've almost always had both whereas he US started only commercial and the UK started only public. The trick in our model is maintaining the balance. I guess the biggest shame was that the FTAs couldn't get their act in to gear on how to move the jointly owned SKY news into an FTA multi-channel.

The regional hubs are far more akin to community media that public broadcast, and are more about "digital capability building" than new "broadcast" services. It is really hard to argue against more direct community engagement, especially as almost all "local" papers are now just pat of one of three conglomerates. The hub model creates the idea that the hubs can "rip and read" ABC content but still be local.

The real question is whether anyone outside the media itself cares enough about media policy to force either party to put effort into developing one before the election?

Identity Numbers

I really feel sorry for the vast bulk of people on this planet who have no unique identifier. Due to an accident of history (well my grandfather's decision to change his surname) I have a surname that as far as I can tell is only shared by other descendents of my grandfather or those who have adopted it through relationships with members of the first group. Of that select group I'm the only David.

That doesn't happen for most people. With a world in which more and more data is capable of being stored electronically the desire to be able to efficiently retrieve it is understandable. The simplest way to do that is with "identity numbers". We now have two proposals for such beasts.

The first occurs in the context of e-health and the proposal for a national health identifier. The only way to line up the health records everywhere is with an identifying number.

Bizarrely that can't be just your Medicare number because of the earlier decision to put multiple parties (a family) on one card and hence number.

The other case is in education where the idea is to give each kid a number so that their test scores can be aligned over time as reported in the Oz and the SMH.

This, of course, raises ire in many over Big Brother. In the 80s their used to be grand fantasies on late night radio on the computer centre in the (unused) Deakin xchange being used to line up the data held on individuals across multiple data bases.

It is interesting to note that the generations more used to having to have numbers for lots of things almost yearn for a simplification, as reported in the Punch.

For health you have a Medibank number and a private health care number (if you pay), every hospital you've ever been to gave you a number when you visited.

In education you have a number for your HSC and a number for any Uni you've attended. It becomes a nightmare hen, say, you want an academic transcript and they want your number from ten years ago.

Meanwhile we decided not to have a national ID card. There was an Access Card proposal or all Social Security and like things but I don't know where that go to. We at last sorted out ABN's for all kinds of trading entities, and income earners all have unique tax file numbers.

The question becomes, if we want a unique tax number, education number and health number should they be the same? The answer is probably no. Not because of Big Brother concerns and aligning data bases. I'm sort of happy for that to happen especially for statistical data bases (how accurate could a health study be relating the incidence of health issues to education and income be huh?). Where the issue is in relation to identity theft and non-Government intrusion.

We all at least see on TV and movies how Americans use the Social Security number as the unique identifier for everything including credit checks, and just how vulnerable you can be once that is misued.

So we want some unique identifiers, but the number is greater tha one. How many should it be?

Thursday, February 25, 2010

NBN Co legislation

Oh dear. I thought telco policy had moved on from the days when every piece of policy was scrutinised through the lens of its implication for telco privatisation, but today it appears it is still the case that commentators only look at the implication of NBN policy from its impact on Telstra.

The Government yesterday released exposure drafts of the NBN Co legislation. Firstly that is a great step and much better than, say, the Howard Government's final Telstra privatisation Bill wich was introduced with no consultation and gave industry one day to prepare for a one day Senate hearing.

But both the Oz and the SMH report the provision in the Bill that the Minister can authorise NBN Co to sell dierectly as a threat to Telstra. The conclusion is reached because of references to Government Departments.

The reality is that, firstly, Government Departments are big customers in terms of revenue but very poor in terms of profit - simple because they have been big enough to get most of the benefits of competition that exist so far. Secondly the real concern here is that the ability to do things like e-health and e-education shouldn't be impeded by the need to deal with service providers. This isn't about Government using the NBN to connect to its premises, but to citizens.

Meanwhile I note in industry newsleter Communications Day the speculation on the fate of the other current bill, the one that does seek to split Telstra. They write in part;

The government’s desire to separate Telstra originally appeared set to split the coalition, with Nationals Senators Fiona Nash and Barnaby Joyce advocates of separation while Liberal colleagues rallied against any split. However, the Nationals are now set to vote on coalition lines with Joyce in shadow cabinet and both Senators determined to force the government to reveal numerous secret documents relating to the original NBN process. CommsDay understands that Joyce and Nash could still push for a Telstra split at a later date – but not until Conroy releases the McKinsey/KPMG NBN Implementation Study, due to be delivered to the minister by the end of the week.

I can fully understand that the new world order of the coalition prohibits them splitting on the issue. But the new world order should perhaps contemplate a change in their approach to communications policy, just as it did a change on climate change policy. As it stands today the coalition has no communications policy other than to say no, or perhaps that OPEL was better.

It is interesting to note that they never demanded an ANAO report on the cancellation of that contract. That's perhaps because they are afraid that not only will it find the Government was right to cancel it because the conditions precedent were not met, but that the ANAO would likely find that he contract should never have been entered into.

Meanwhile after the replacement of Minchin with Smith the coalition still hasn't progressed on communications policy. Conroy used to count the number of releases Minchin had come out with without a single policy proposal. Smith isn't doing any better.

Perhaps these were the kinds of people new leader Tony Abbott was addressing when he's asked them to "use their brains" at his policy roundtable on Friday. Not much chance of decent communications policy if (a) it is only Liberals, and (b) Henry Ergas is in the room.

Finally, the coalition seems to wrap themselves in a sanctimonious flag of demanding the release of certain documents prepared for advice to government. First it was the expert panel report and now it is the implementation study. In Government the coalition never released such documents. Holding Government to account means holding them to account on outcomes not second guessing the decisions.

I hope the Nationals find the courage to go to the coalition meetings and say that the cause of improved telecommunications to regional Australia is not advanced by an opposition who simply refuses to debate legislation, or opposes legislation such as structural separation (a long held National Party view) or fibre to the home (which was the core of the Page Centre report).

COAG Reform Council

I only saw a report in the AFR on the COAG response to the COAG Reform Council report National Partnership Agreement to Deliver a Seamless National Economy: Report on Performance 2008-09 .

The general feling from the reports was great disappointment on the speed all round on these reforms, which unfortunately get carried by the Government under the rubric of "de-regulation". It doesn't help that the COAG Reform Council itself is an odd beast. It seems to have been created initially by the Howard Government to report on how to reform COAG, whereas it is now operating merely to report on the progress of "reform".

In many ways the whole exercise reflects the paucity of institutional arrangements to really manage inter-governmental co-operation, and in particular the structural impediments to moving anything from a State regulatory structure to a National one. Even once harmonisation is agreed it always remains possible for one State to fracture that agreement by simply having new legislative provisions.

The creation of the Australian Consumer Law currently going through Parliament is a cse in point. This is the second time this law will be harmonised. The last time the States all enacted the same provisions in their Fair Trading Laws as appeared in Part IV of the rade Practices Act. But all of them were individually amended.

The model of the Australian Consumer Law is harder to do this to, but it can happen.

These proposals to create a "seamless national economy" really are part of the ongoing project of Federation. Federation was about two things, a free trade agreement betwee the states and a unified external affairs policy. It is just that as the means of production change, and transport and communications advance, the "boundary" conditions for what is logically a State issue in economic regulation change.

The last time we addressed issues such as this was the mid 90s with the national competition policy. The mechanism for introducing that was the National Competition Commission and a financial arrangement that notionally compensated States for economic value foregone (dividends of SOEs and more generally the rents extracted from monopoly licences) but became a system of payments for reform.

It is perhaps time to recreate the constitutional device of an Interstate Commission that should be charged with the permanent responsibility for developing a seamless national economy. Rather than a qango whose only job is reviewing progress, create a qango whose job it is to drive the process.

The Public Service, the Future Fund and the Inter-generational issue

One of the questions Lindsay Tanner was posed on Q&A two weeks ago was a set up question on the declining value of indexed pensions. Tanner did a very good job of explaining why it was unfair on thos who'd taken lump sums to now vary the rate.

But the defined benefit scheme that is the public service scheme really is a big problem. This week saw the announcement of the retirement of Col Lyons as a Deputy Secretary at the Department of Broadband, Communications and the Digital Economy. This is a Department desperately short of experience and Col is one of the few to have a good understanding of the telco and broadcasting sides of the portfolio.

There is something weird in the superannuation scheme that encourages Public Servants to retire at 55. I think it is to do with the relatively small rate of additional increases in the final pension for any additional years of service, so the only equation left is whether the income foregone between salary and pension is greater tha the value of the leisure time gained.

Added to this is the possibility for the public servants to gain additional employment post retirement, often courtesy of the Department they have left.

Meanwhile we are being reminded in inter-generational reports that our greater life expectency and the movement of the "baby boo" bubble means the shape of the population pyramid changes and there are less labor force participants. That means, we are told, we all need to work longer.

On the flip side we have a Future Fund that isn't about funding anyone's future other than retired public servants.

Lindsay Tanner needs to get the expert who told him that he couldn't change the scheme to give him some different advice on how to change the scheme in such a way to retain public servants past 55. One suggestion that doesn't suffer from a retrospectivity problem is to change the index rate that applies to a pension depending upon how many years past 55 a public servant retires.

But there must be some other more creative ways to get the people who give advice to government that we all ned to work longer to work longer themselves!

Tuesday, February 23, 2010


Late last year Gerard Henderson noted that Q&A almost always has in its panel of five three from the left, two from the right and the not unbiased Tony Jones. Last night's episode followed the pattern. John Roskam from the IPA definitely right, Malcolm Turnbull presumably right, Mungo McCallum and Tanya Plibersek definitely left and Jane Caro trendy left.

That said it was much much better than the weird panel last week.

I haven't listened to it all, though the ABC online reports that Turnbull is still considering whether to run again. He has ruled out running under a different brand or going to State politics.

We should all hope he hangs in there. His answer at the end of the show on the homeless reflects that as an MP he is the kind of person we need in the Parliament.

Now I haven't been following the story on Peter Garrett. I don't think the Federal Government can be held directly accountable for the lives lost and homes burnt down because of the excessive rush, what does remain is the fact that enough people understood that there wasn't sufficient control of the industry to manage the risk, that the issue was with the States and the States weren't acting.

On that basis it would seem that Peter Garrett has failed in the responsibility as a Minister.

But the fascinating part on Q&A was to here the left (Mungo) saying the Government couldn't be accountable for the acts of individuals, and the right (Malcolm) suggesting that Government has to take responsibility.

Ultimately, the program probably makes a greater case for the abolition of the States than even the health issue.

Thursday, February 18, 2010

WiMAX again

Just a mental note to self. Two recent articles of interest on WiMAX.

The first does a comparison of the various post 3G standards. It has this nice brief description of what's different (remembering it is a US example);

Existing 3G networks, like the ones run by all the major carriers, promise download speeds in the 1-2 megabit range. That's good enough for Web surfing. But WiMAX, HSPA+, and the LTE systems that Verizon and AT&T are starting to set up are much faster—think 5, 8, 12 or even 21 megabits/second, with more to come in the future.

These aren't phone-call networks, though they'll probably make phone calls. Think of them as high-speed Internet pipes into anything you're carrying with you while you're on the move—and potentially, hopefully, competition for the cable/telephone ISP duopoly that holds a death grip on home Internet.

The story puts HSPA+ in the same bucket as WiMAX and LTE and on the criteria of the article it is probably reasonable. The articles biggest criticism of WiMAX has been the wait, and the device volumes. Both of these are now historic concerns. The real test between HSPA and WiMAX isn't their theoretic peak speeds but their performance as networks with real customers. That's something we have to wait for.

But consumers aren't just concerned about raw speed, it is the price/quality combination that counts. There are plenty of reasons to believe that WiMAX should be superior here.

The second is an update on a thesis of the convergence of LTE and WiMAX standards. Ultimately the 3G battle between the GSM and CDMA camps was resolved by a CDMA air-interface and GSM network standards.

The issue and challenge for LTE operators is their need to be an upgrade pathe for the existing voice and text suite. These are relatively high margin businesses compared to data and the business case for the migration to al IP is just as hard for a mobile operator as it is for a fixed operator.

It is in the interests of the mobile communications providers to maintain a separation between the higher margin voice market and the very different mobile computing market.

There is lots to observe.

Wednesday, February 17, 2010

Sydney men eat mustard

The University of Sydney is giving its logo a spring clean as reported in the SMH today.

Anyone familiar with logos would know that even things as old and venerable as the Coca-Cola logo go through regular refreshes. And at least Sydney is sticking with the basic form of the shield - unlike Macquarie University which ditched its logo based on the Macquarie Lighthouse for three blobs a bit like BHP Billiton.

Sydney has also dropped the Latin motto for most uses - but it will still be on testamur's. I've been wondering what Macquarie testamur's look like with the blobs (I have one from each Uni). The explanation given is that the logo is too detailed for faithful rendering on line - which sort of makes sense.

Anyway the latin motto is "sidere mens eadem mutato". It isn't really very clear. Most literally it is something like "the starts my change we remain the same" which the SMH notes is "a reference to Sydney following the traditions of universities in the northern hemisphere."

But I always preferred the version of Bill O'Neill, a psychologist who was a Deputy Vice-Chancellor of the University.

Sydney men eat mustard

A couple of howlers

If one was into conspiracy theories one would think News Ltd has decided to target Stephen Conroy, possibly because News/FOXTEL isn't getting the easy ride in the lobbying stakes it might hope for. But that is no excuse for inaccuracy.

Today Peter Van Onselen has written in the Oz that Conroy should go because of "multiple failures". One of the targeted events is the appointment of Mike Kaiser who the writer claims "had successfully lobbied for the [NBNCo]'s head office to be located in Queensland". That's news to all those employees in Sydney and Melbourne, and indeed conflicts with Hansard from the Estimates hearing where the appointment was discussed where NBN Co CEO Mike Quigley states that "We have not got head offices." He goes o to outline how they are just recruiting staff to work in Sydney and Melbourne according to where the talent is (which is how Telstra and Optus at least have worked for some time).

The Kaiser appointment is being over analysed. It was Conroy himself who advised the Committee that he had suggested to Quigley that Kaiser would be qualified. Nothing in the rest of the evidence suggests that the decision was otherwise influenced by the Minister - he was simply a referral. Kaiser did not conceal any part of his past. His salary is determined in accordance with standard HR job grading activities.

Personally I wouldn't have made the choice if I was Quigley, because of the political risk. But equally this job is actually about talking to the States not the Commonwealth, and Kaiser as a former Premier's chief of Staff in both Qld and NSW is extremely well qualified for that.

Meanwhile the Telegraph has tried to make something of the move by Conroy's media adviser Tim Marshall to Alcatel-Lucent. The article forgets to mention that Tim is extremely well qualified for this role, he wasn't a party hack turned staffer, but a respected communications journalist who was prebviously editor of Communications Day. His successor in that role, Luke Coleman, has just made a similar move to Tim, but to Huawei.

The lobbying code of conduct doesn't prohibit former staffers from moving into industry, only from "lobbying activities". Tim isn't joining Alcatel-Lucent as a lobbyist, but as a mrketing and communications manager.

Updated I note that the ABC reports this as a potential breach of the "ministerial code of conduct" which is a document I can't seem to find. I can however find the Code of Conduct for Ministerial Staff. Once again, no breach!

Returning to the Oz article we are invited to see something underhandi the Conroy/Stokes meeting in Colorado. There might be an issue if there was a suggestion of payment, but there isn't. As Lindsay Tanner said they it happened they were going to be in the same place at the same time and they arranged to see each other. The Australian public and Seven shareholders should be pleased that both of them seemed prepared to work on their holidays. As indeed each should be pleased that these two men talk. The Minister is informed on industry issues, the Seven CEO spends his time doing it.

That does't mean this is Conroy's only input. After all he has established and funded the Australian Communications Consumers Action Network (ACCAN) which has already been a vocal critique of Goverment policy, and is also consulted with by the Minister.

As an aside - the Hansard is only Proof but includes this delightful line. Senator FISHER—Minister, I will go back to Mr Quigley. You can run your interference and I will stop talking to you. I had better put my mouth back in my mug; that might be a better place for it.
I want to see a mouth i a mug!

Disclaimer. I am employed by a Seven company. My views in this blog post are my own. Their intention is to comment on the quality of the reporting as such, not to attempt to defend anyone's particular actions.

Tuesday, February 16, 2010

Tanner and Joyce on Q&A

I only caught up with Q&A online today.

A couple of standouts.

Barnaby Joyce referring to the "cyclical angel descending from heaven and making everything better." It elicited a stiffled "what the?" from Lindsay Tanner - but did reflect the ways that Barnaby can conjure with language to create memorable images.

An interesting answer by Lindsay Tanner to a question on flat rate tax. The questioner was running the line that a flat tax was better because our higher tax rates on higher incomes act as a disincentive to further effort.

Lindsay's reply was that he saw no evidence that at the higher brackets the financial return was necessarily the primary incentive. Actually, he could take the incentive argument further. In theory at least a person who has $1 will value an extra $1 more than a person who has $100 will value an extra $1. If there were merit in the incentive argument you wouldn't chose a flat tax, you'd choose a regressive (as opposed to a progressive) tax.

We do know that the "other Henry" tax review (by Henry Ergas) that got buried in Malcolm Turnbull's office did propose a flat tax. That will create some amusement.

Monday, February 15, 2010

That's me

In the Waratahs Jersey and bucket hat behind the redhead. Nerve racking win on Saturday.

Tuesday, February 09, 2010

This week in politics 2

This week has already not disappointed. I foreshadowed yesterday that eventually the Government would explain why an ETS was the preferred approach.

Then yesterday in the Parliament Malcolm Turnbull delivered a speech (at page 6) that was described in the Oz as an excellent speech delivered too late.

In making the case for an ETS Turnbul said;

But, given we have an apparent bipartisan agreement that emissions should be reduced by five per cent of 2000 levels by 2020, is an emissions trading scheme, this CPRS, at a general level the best policy to achieve the desired outcome? Believing as I do, as a Liberal, that market forces deliver the lowest cost and most effective solution to economic challenges, the answer must be yes.

He continued;

These changes have made it into a scheme that appropriately balances environmental effectiveness and economic responsibility. In fact, the proposed scheme very closely resembles the outline of the Howard government’s original 2007 proposal, in both its incidence and its timing. As we have seen in recent days, alternatives such as direct regulation or subsidies will be far more costly to the economy, no matter how hard their designers seek to argue the contrary.

And concluded;

The proposed ETS is a balanced, substantive and timely step forward on an issue of immense importance. By relying so heavily on market forces to address this very severe challenging problem, the ETS is far more in the great traditions of modern liberalism than any other available policy response. After all, I have always believed that Liberals reject the idea that government knows best and embrace the idea that government’s job is to enable each of us to do our best. This ETS allows Australian businesses to make their own decisions as to how to reduce their emissions. Government sets the rules and, in particular, sets the cap on total emissions and then lets the market work out the most efficient and effective outcome. Schemes where bureaucrats and politicians pick technologies and winners, doling out billions of taxpayers’ dollars, neither are economically efficient nor will be environmentally effective. For those reasons, I will be voting in favour of this legislation.

I think the only point he failed to mention is that a market mechanis eventually allows for global trading in the right to emit - so that eventually where, for example, the fossil fuel is burnt is irrelevant. That is, the decisio on where to burn Australian coal is not determined by a country's own targets but by the global target.

Meanwhile the rest of the commentariat in berating spin only asseses spin. I didn't watch all of Q&A - I find the format sometimes really hard to bear. But I don't think the kids caned the PM. In fact, I don't think that is what the audience thought it was doing.

I pose an alternative view. Would the ABC have been able to fill the same room with as many young people to engage the previous PM? Probably not.

Malcolm Colless writing in the Oz has returned to the theme that the PM is a micro-manager who isn't getting the right kind of strong advice from his office. I never thought I'd see the day where a member o the fourth estate was suggesting a PM needed to employ more thuglike characters such as Richo or Peter Barron.

But you see this is still a journalist who criticises the PM as not having substance but thinks the solution is in how you spin it;

Rudd clearly feels that there is a lack of appreciation in the community of the hard yards that his government has covered through daunting times such as the global financial crisis. But in difficult times the electorate is driven very much by hip-pocket issues. The spike in his ratings after he doled out mega-millions in goodwill cheques proved that. But the value from this gesture has quickly dissipated in the face of inflation-driven rises in interest rates and the consequent cost of living. No wonder his tax-based emissions trading scheme spooked the electorate.

All of this underlines the need for a new direction in Rudd's strategy for communicating with the electorate as he leads Labor to this year's poll. He is quick to remind the community that he is up to making the tough and sometimes politically unpalatable decisions that are necessary to make Australia a better place.

It is really easy to make an accusation that the Government doesn't make tough decisions, and then decide to interpret the stimulus plans and other GFC responses as anything other than tough.

I sometimes wonder whether our working press now dislike Kevin Rudd for the same reason they disliked John Howard. That is their determination as PM to try to talk directly to the people rather than through the mediation of the press.

If the press were to start doing decent policy analysis rather than reporting politics as a horse race or celebrity then Prime Ministers might again take them seriously.

The greatest irony of the demise of Malcolm Turnbull is that it was all reported as about the horse race, about winning leasership and winning elections. As I've previously noted losing the Liberal leadership was probably in the long run a good thing for both Turnbull and the Liberal party.

He certainly showed yesterday not only his quality, but why he is appropriately a member of the Liberal Party rather than the ALP. The question is what the rest of the Liberal Party thinks they stand for?

Monday, February 08, 2010

Sarah Pallin at the Tea Party

Sarah Pallin waxed lyrical in her Tea Party speech on the wonders of the "competitive primary." I think there are lots of Republicans who wish they'd had a competitive process to choose the VP candidate!

You've probably heard all the good lines...there are a number of conservative classics like just putting down the President as "A charismatic guy with a teleprompter".

It is fascinating that Pallin like others over-calls the significance of Massachusetts. This was a very classic by-election outcome where the supporters of the incumbent didn't realise they'd need to vote.

The Pallin speech was addressed to the Tea Party but was a lot about national security wanting tough sanctions - clear Foreign Policy that reflects democracy. This is really at odds with classic Tea Party members who are the kind of US isolationists who normally don't want to go to war elsewhere.

She invokes concerns with not caring for the constitution - but then rants about Government bailing out corporates and calling the recovery "crony capitalism". Yet she doesn't think the constitutional protection of rights should aply to foreigners.

And I've only watched the first twenty minutes so far!


This week in politics

Politics across Australia have got very interesting, not least due to the number of impending State elections, and of course a forthcoming Federal election.

While some of the news has been about the way the conservatives (both parliamentary and extra-parliamentary) have clawed back territory on the climate change debate, I personally see it as transitory at best. The success is based on two things. The first is the damage being done to the "science", which I've noted before comes more from people over-stating the case for "science proves" rather than "the more convincing scientific argument is".
The second is the transitory appeal of spending our way out of the problem rather than putting a price on carbon (which is sold as a great new tax).

Eventually the public will understand the difference between a Government action that changes price relativities and an actual tax. More importantly the Government will eventually successfully explain that the benefit of an ETS is that you can eventually do international trades on emission rights. It was, after all, the conservatives who promoted the idea that unilateral action was pointless (we only have one atmosphere) - yet they are the ones with the most unilateral policy!

But far more interesting is what is going on inside the Liberal Party. Glen Milne reports that following the leadership change in the Liberals there are now two groups prortraying themselves as "the right", those who organised the coup and another group whose claim stems from their christian conservative values. This divide marries up with the brawl in NSW in which Abbott is reported to have defended David Clarke.

We are offered the tantalizing view that the Liberals have got over their right v moderates fight only to have a right v right battle.

In the midst of this we are told the ALP is targeting leading Liberal moderate Chris Pyne's Sturt as a winnable seat in the election. And we have Tony Abbott trying to defend Barnaby Joyce by telling us that Barnaby could be a new Black Jack McEwen.

The latter news shoul terrify all his Liberal colleagues as McEwen is the individual most credited with holding back the Australian economy from domestic and inernational competition in the 60s and 70s. The inclusion of Doug Anthony in the list does little to make one feel better, as he totally continued the traditio in the late 70s and early 80s.

It is, of course, really what parties in opposition need to do. They need to have a near Darwiniam fight within themselves to determine their policies and leadership. But all too often it is reduced to fighting over the spolis of opposition (such as entitlement to promotion as a shadow), false claims of some kind of group structure (non-factions) instead of the truly hard yards of what you stand for.

It is hard to get any senseyet of what the new conservaive face of the coalition stands for. They are clearly going to keep targeting the deficit, and interest rate rises if they can. But the average Australian does understand that we dodged a bullet - through the combination of thirty years of exceptional Government and early and decussive action in this particular case.

It will be interesting to see if Estimates results in any better targeted attacks.

Friday, February 05, 2010

The ANAO report again

I suggested yesterday that the Liberals will find no joy in the ANAO report on the NBN.

I neglected to mention the spin that some such as Stephen Bartholomuesz put on this that the report detailed a "$30M failure". The figure includes the costs of industry to respond, not just the costs to Governmenment.

Meanwhile the ANAO report criticised the NBN process for being a one step rather than two step process, going straight to RFP withut an intermediate RFI. It could be argued that the first process really ended up just being the RFI from which NBN 2.0 was built.

But getting too stuck in to Conroy will be hard given the ANAO has also just reported that the former PM awarded $100M in water projects against departmental advice.

Meanwhile Conroy's defence at a personal level has been detailed in today's Oz, which outlines in a bit more detail the battle between the Minister and his Department.

This continued a duel begun when Senator Conroy was opposition spokesman on telecommunications and highly critical of the department and its head. From the beginning, he knew the department's tender process was flawed, and he was as frustrated by its failings as those attempting to bid for the right to build the relatively modest fibre-to-the-node system.

But his complaints and attempts to change the process were overruled by the Department of Prime Minister and Cabinet and its acting secretary, Jenny Goddard, Scott's partner.

Estimates next week will indeed be interesting! If I were the coalition I'd change tactics. I'd get out of the way on the NBN - at the moment they are the excuse for the Government. "We haven't been able to proceed any faster because of obstruction by the coalition in passing enabling legislation". The infamous Senate order on not debating NBn legislation until the expert panel report from NBN 1.0 is released is technically the touch point.

Thursday, February 04, 2010

Both shoes drop

The Opposition must be realing a bit in its pursuit of NBN matters. Their determinatio to pursue the Government over the processes for the NBN has led to two reports, one from a Senate committee and one from the ANAO.

The first report was from the Senate Standing Committee on Finance and Public Administration on Independent Arbitration of Public Interest Immunity Claims. This report ultimately arose from the demand from the Senate that the Government provide to it the report of the NBN expert panel. The government claims public interest immunity from providing it. The independent and Green senators, with coalition support, initiated this inquiry to determine whether the Government should have to undergo some sort of independent process to judge that claim.

The committee, chaired by a Liberal has recommended against that course of action. That should lead to the coalition backing down on its demand for the assessment report.

There might be more joy in the report of the Australian National Audit Office into the NBN process.

Most importantly the ANAO puts paid to any suggestion there is some cover up in not releasing the Expert Panel report, noting at para 25 "The conclusions and recommendations in the Panel’s Evaluation Report are supported by appropriate evidence. The Panel’s published observations of the process generally represent the reasons for the non selection of a national proponent, as well as provide some advice to the Government on policy options for going forward."

The report continues at para 28 to say, "Despite the RFP process’s complexity and short timeframe, the Panel and the department conducted the formal process well, within the parameters of the Government’s broadband policy and in accordance with the CPGs."

Some other parts of this report I find particularly enlightening though.

The first is from para 13 - "The Government’s approach was to pursue a process that maximised competitive tension between potential proponents and promoted innovation to achieve the best outcome and best use of up to $4.7 billion in government funding." I do not understand how anyone could think that "competitive tension" was the right objective. The major protagonists - Telstra and the G9 or FANOC - would have needed to become customers of the winner. That is not a logical model.

The report spends a great deal of time on the issue of "regulatory flexibility." At para 29 they note "requesting proponents to outline their preferred regulatory environment for their NBN was unusual for an RFP process and made a complex commercial transaction considerably more complicated."

The difficulty for the coalition in pursuing either of these is that the idea of competition for the right to build the network was the coalition's when in Government, as was the idea of "regulatory flexibility". Indeed the coaition just started to run a tender for the regulatory regime before the election was called.

So, back to square one. Tny Smith can call them Chaos Conroy and Reckless Rudd to his heart's content, but at the moment the record shows their only failing was to continue some processes Helen Coonan started.

Property rights and the law

One of the important strands of economic theory has been the "law and economics" movement. It has two strands - one that comes from economics as part of institutional economics, the other comes from the law and rationalises the development of common law as an economic process.

The first of these is especially associated with the work of Douglas North and finds it greatest expression in strands of development economics that says you can't get development until you get processes in place to define and protect property rights.

The second is most associated with Richard Posner who argues the common law reflects a process of choice to support economic efficiency. It is a case partially well made in analysing the development of the common law of trespass (or tort) and contract.

But it all falls apart a bit in the real world, and especially in relation to the role of the state. In particular the state takes on the role of the enforcer in relation to actual property possession, but only provides the arena for the enforcement of the property rights inherent in contract.

The new world of a Digital Economy has placed some constraints on this model. The decision today in Roadshow v iiNet highlights one of these. The law has created a concept of copyright but it is largely up to the holder to enforce their rights. In the action the court found that there had been infringement, but that iiNet had not, as claimed, authorised it.

The question left for the rights holders is very much one of what use is the (property) right if I have no means to enforce it. It is really, really hard for them to do so. In physical property we don't leave it to the individual to enforce their own right, we have a police force and public prosecutor. Without them there would not be effective enforcement of the property right in physical property.

On the flip side one issue that plagues e-commerce is fraud. Fraud is a crime, and hence does fall into the purview of police and public prosecutors. But it is difficult to investigate and prosecute, and many firms find the enforcement inadequate.

Our system has only two models, private enforcement or public enforcement through government agents. Is there a case for a different model, of a "club" good in enforcement?

Wednesday, February 03, 2010

Abbott-stinance and Monckton-ing

Breakfast Politics linked the Oz's story on Tony abbott's climate change policy with the words No cap, no compo & little abstinence in Abbott's climate plan.

It made me think of Tony's approach in another matter that was important to his faith wherein he also couldn't practice abstinence, in that case leading to the story of the child who wasn't. Is there a pattern forming?

This suggests a new word "Abbottstinance" which is when you profess that you will give up something, but never actually do!

Meanwhile why is it the opposition can't get their heads around the difference between putting a price on carbon and a tax? And exactly how does Tony now attack any part of the deficit when in his words he is opposing a tax and just wants to spend money on climate change.

There is about a 10% chance he could be successsful with a Bush-esque strategy - talk fiscal conservatism but only pracctice profligacy.

How the Government responds to Abbott will define the outcome. What they have to avoid is treating Abbott like some kind of lunatic. Parodying your opponent doesn't work, just look at Barnaby Joyce's ongoing popularity. The coalition didn't ever target the madness that was Latham - they just gave him space to do it.

This brings me to the justified criticism today by Andrew Bolt of the way what he calls the "warmists" have dealt with Lord Monckton. He focuses on some of the gang tackle approaches and in particular writers who use his (disease based) appearance as a point.

It took Paul Sheehan in the SMH on Monday to point out the idiocy of the claim that Monckton describes himself as a Nobel Prize winner. He actually claims this as sarcasm about the fact the whole IPCC won the Nobel Peace Prize. (Which I've previously described as a farce.)

I know how hard it can be to argue with a personwho won't accept the premise of your argument. But that is not an excuse for degenerating into mocking the person. Worse, mocking will backfire.

So my other new word is "Moncktoning" which is to lose and argument by trying to mock your opponent rather than engage with them.

Tuesday, February 02, 2010

On democracy

I have had cause recently to blog about the difference between a republic and a democracy, at least in the eyes of the early US political theorists.

At the same time I could write about the number of books that make an assumption that political democracy was meant to be only a pathway to economic democracy (as an example Paul Fot's The Vote). It is in this context that the reaction to democracy can be understood - not that letting people have a vote per se was a bad idea but that once you gave the poor a vote wouldn't they just vote for economic redistribution.

Two items on Business Spectator today take the old fashioned concern for the perils of democracy too far. First Robert Gottliebson ponders the question of democracy devoring itself. Under this thesis Government's are evidently making "populist decisions" that risk our economic well-being.

The evidence offered isn't extensive. It included "The other day I was talking with the chief of a major global company who ranks the rise of international populism as the greatest challenge he faces." The two areas of argument offered for Australia are Industrial Relations laws that "take us back 25 years" and "considering a resources rent tax". The former is an assertion about consequences not yet proven, in fact you would be hard pressed to find many real business people as opposed to commentators actually worried. The second is only a worry if the state taxes supposed to be removed aren't. Which really you could have said about the GST in 1998.

He then suggests we are attacking banks, but it is only because we "villify" them over their interest rate hikes. A better response than to suggest that democracy is a problem might just be to defend the banks like I did.

The perfectly rational response in the US of limitting the economic activities of banks and questioning awarding bonuses to loss making execs is regarded as populist rather than, as I see it, merely rational. If the move against the banks was as merely populist as suggested, and so easy to pull off, wouldn't Obama have done it BEFORE the Senate by-election, not after?

The real giveaway is the para;

A couple of decades ago politicians realised that they had to be careful when putting the business community offside to please voters. It is still early days, but the signs are there that the lessons of the past have been forgotten.

That is just bull dust. Government learnt it had to make sure it did not suppress economic activity. Getting people "offside" ain't the issue.

Karen Maley got more philosophical on the topic of the illusion of leadership. Kevin Rudd and Barack Obama are both supposedly "long on rhetoric, and short on tough policy initiatives".

Geez I don't know. Was reaching into the fiscal bag and driving up a deficit that you as Goverment have to deal with an EASY option? Was any of the decisions, be it to intervene and save a bank, or to not and let one go down anything other than "tough".

In case anyone missed it Obama inherited a Federal budget deficit of extraordinary proportiions because Bush was trying to "defund the left" by leaving nothing left to be spent. So is Obama prioposing to increase some taxes to correct the budget defioit anything other than a tough decision? It sure isn't rhetoric.

The argument in Australia comes down to this;

The big gains in productivity growth that we witnessed in the 1990s were a direct result of the huge economic reforms undertaken by the Hawke/Keating government. Initiatives such as pulling down the tariff barriers, floating the dollar, deregulating the financial system and privatizing inefficient government monopolies lay the ground-work for huge improvements in productivity. In contrast, the Rudd government’s commitment to lift spending on infrastructure and education involves a good deal of rhetoric. And very few tough decisions.

Firstly micro-economic reform is a bit like creating growth by lowering interest rates. You get to a point where you can't go any further - you can't have a negative interest rate.

I think the one reform we could pursue would be to start breaking up some of the inefficient private sector monopolies and oligopolies, but the BCA that used to be the champion of micro-economic reform is now the oligopolists club where "free market" means the right to maintain market power.

Hmm, now if you can't get magic efficiency benefits by creating more market where can you. Oh how about improving human capital (by education) and social capital (infrastructure).

It remains a fact that the Howard Government's biggest reforms in transport infrastructure was to take on the unions to improve crane rates at container terminals. We became more efficient at processing imports. But not a cent was spent on building infrastructure to service exports.

Give me Rudd's "rhetoric" over that kind of action any day!

Meanwhile can we get over the obsession with "leadership", "tough decisions" and the dislike of "populism". The reactionaries mightn't have noticed but democracy works, but only while you believe in it!

Competition Law types

An item today on itNews says that Amazon has decided to "give in" to demands from a publisher (McMillan) about the prices to be charged for e-books.

This doesn't see to be about the wholesale arrangement betwee them, just the retail prices to be charged.

I can now buy e-books in Australia for a Kindle.

All you competition law types out there - is this a breach of the law prohibitting resale price maintenance?


I was discussing with an old friend the other day the history of disputes at the University of Sydney. I'd brought up the quote from Paul Feyerabend (whose work gave this blog its name) that Sydney had one Opera House, one harbour bridge and two philosophy departments. (The article was I think reprinted in Science in a Free Society)

He was referring to the very famous "split" between Traditional and Modern and General Philosophy in the 1970s. We went on to detail other splits, including between theoretical and other chemists that resulted in a wall being built to separate staff, between Pure and pplied Mathematics creating two (artificial) departments, a split in English, and another that I can't recall now.

But the other famous one was the split in Economics, with the founding of the Department of Political Economy. This was another part of the cause for Marxist teaching, but also an early critique of the idea that "orthodox" economics could be called a fairytale.

That perhaps explains why a Sydney University Economics graduate has been quoted as saying;

I have never been as excited about economics as some of my colleagues; you know, I find economics is not for nothing known as the dismal science.

The speaker was apparently Tony Abbott according to a report on Niki Savva's new book.

Perhaps the young Tony should have tried the Political Economy course, then he might have a different view.

But the challenge to understand economics is perhaps small compared to the challenges of forecasting demand for just one product, broadband. The Age today has a story about the challenge being faced in Tasmania to get interest in the NBN. The network is being rolled out in rural parts of Tasmania that are not what we would call vibrant.

But these challenges are the same for the whole shooting match. As I recently wrote to the industry newsletter Communicatins Day (paraphrased).

The NBN is a necessary, but not sufficient, condition for productivity improvement.

Some have morphed the discussion about productivity into a discussion of decentralization and its cousin telework. Not only is productivity largely unrelated to workplace location, I remain concerned about the ongoing faith that widespread broadband availability is by its very nature a decentralizing influence.

The history of communication technologies is actually the reverse. Studies of the geographic impact of the telephone (see The social impact of the telephone by Ithiel de Sola Pool) in the US show that it was a cause of the development of larger cities and towns. The Australian experience with telephone penetration is that once the phone was ubiquitous organisations (notably banks) closed their service outlets and communicated with customers by phone. In general, if the technology allows you to conduct your business from anywhere, your choice of where is more likely to be where there are more people not less. As telemedicine becomes more practical, more specialists will leave country towns, not the reverse.

The assumption that the “long commute” is wasteful is also largely wrong. At least those on the train are usually engaged in some activity, even if only listening to music. That’s called relaxation, and we need it.

Where the ability to telecommute does come into its own though is in the ability to improve participation rates. It is a good way to effectively get a few extra hours of work from someone – be that unpaid overtime or the part-time at home participation of new parents.

That said, greater availability and use of broadband can result in further productivity improvements. To do so, however, businesses and individuals need to understand the opportunities even better than they do today, and we need to get to near ubiquitous penetration levels before most will be realized. The example used earlier of banks is telling, they did not invest in call centres at all until phone penetration (including with DTMF signaling) reached close to 100%. Similarly ten years ago businesses would say “why would I need a website” – which was a good question when only a small percentage of potential customers could or would access it.

To realize the productivity impacts we need a much better conversation about the productivity effects than we have had to date. Unfortunately, I don’t think large scale telecommuting is one of them.

This tirade was trying to address a number of things. Firstly that the benefits of the NBN will depend on ubiquity, and that telework and a magical decentralisation are over-hyped.

What I left out was a criticism of the insistence on talking about education and health. Even in the article about Tasmania cited the mayor said "I know the high school and the hospital are quite keen to have it." If it was about connecting hospitals and schools you ould build a totally different network.

The challenge of the NB is getting people to understand what its impacts will be. I'm very afraid that we'll get about half-way through and still have people saying "what is it for" before we get to the ubiquity necessary for a transformation.

Monday, February 01, 2010

Competition in banking

I remain fascinated by the ongoing discussion about the level of competition in retail banking in Australia. The latest comment by Karen Maley I think correctly notes that it would be an error for Australia Post to get into banking. She is right to note that we don't need Government funds tied up roviding the capital necessary for Aussie Post to get into lending, and nor do they have a distribution network that cries out as being ready to take on another product.

The argument for the need for greater competition is based on the assumption that the four banks can only increase lending rates faster than the official cash rate increases because of a lack of competition. This is patent nonsense, because the cash rate is only one of the factors that will influence a banks costs of lendng. The risk profile I'm prepared to accept as a lender is another, as is the overall position of the global availability of credit.

Yes the banks haven't increased rates at imes other than the RBA rises, but that's largely because the decision to increase rates isn't free of transaction costs. Apart from all the collateral changes and system changes, every rate rise will result in a high number of transactions with customers over requests for changed repayment terms, and inquiriers about early termination, or new lenders if the rise is elsewhere.

Therefore it is logical to vary rates at the same time as RBA rate changes especially if they are expected to be soon.

The decision by one bank not to go beyond the RBA rise may be due to a decision to squeeze margin to gain share, or it may simply be by achieving offsetting savings by, for example, restricting lending to "safer" propositions.

I want to remind all these commentators that the competition from mortgage originators in the 80s and especially 90s was the source of our current mess. These were the guys for whom the securitised debt instruments were created. These were the things that after derivative was added to derivative everyone became unable to accurately price (that is, assess risk).

(If you are into complexity theory it truly was wonderous. The collateralised securities were assumed to spread risk, because house prices had only ever gone down in the past in isolated pockets. What they didn't account for was themselves. The new products, by diversifying risk, increased the appetite of lenders to take risks. The availability of finance however also increased the demand, and hence price, for housing. As a consequence lending to anyone seemed like a good idea - after all the lending risk was diversified and the asset value of the securities were increasing. These were the NINJA loans (No income, no job, no (other) assets).)

If people really want a good old fashioned socialist kind of banking, the alternative is co-operative banking not government banking. We used to have a very vibrant Credit Union sector in Australia. It got a bad name through some building society failures but improved dramatically once there was uniform national regulation. Three things killed (they aren't completyely dead) the credit unions. The first was the arrival of the originators - a lower cost model that we now know wasn't sustainable. The second as the removal of the income tax concession granted to credit unions as "not for profit" co-operatives, that was a bad (Labor) government decision. The third was the inability of the credit union sector to make more of the co-operation between them to reduce their own costs.

I personally am far happier with four banks than I am with two supermarket chains. Apart from incentives for co-operatives the only other policy needed is one to limit the banks to just banking. The disaster in the US also had its genesis in letting DTIs get involved in activities that notionally didn't depend on the balance sheet, but in the end did.

Policy and advertising

We all know that getting a communication to the entire population and getting them to act on it is a challenge. That's why we should not be surprised about reports that the public hasn't got the message on switch-off yet.

It is, however, worthwhile asking why these adds are still non-specific about switch off dates and instead direct viewers to a website. I think technically the ads started before the dates were set - but by definition a television ad is being broadcast on one of the analogue services being switched off. Why, therefore, is there a generic ad around Australia rather than market specific ones?

There is no particular value in scaring metropolitan markets when the simulcast period end date is 30 June 2013 for Brisbane and Perth, and 31 December 2013 for Sydney, Melbourne and Adelaide. It could be argued that the ad is really about promoting the labelling scheme, not about switchover. But don't get me started on the labelling scheme that is really misleading because any TV ever made would get the Digital Capable sticker. If they were engaged in "trade or commrce" I'd be complaining to the ACCC.

And as for the rest of the campaign, I am at a complete loss to understand why you would advertise on radio. Surely every one you want to address is a TV household?

Ahhh the wonders of Government. Where else can you get to spend $48M on an advertising campaign over three years?

Free plug for Crikey

One of the nice things about Crikey is the Video of the Day. Very often they are a nice witty item - usually of course from You Tube.

I'm going to share with you Friday's offering and today's.

Hans-up everyone who is sick of the fact that television news is obsessed with the video report. It's like something can't be news without the pictures. Which is why our "foreign" news is overloaded with stories about crime in the US - there is lots of footage.

My favourite was a story once where the newsreade said "Today Mr X said "Y"", then cut to video of Mr X saying Y.

Anyhow that's a long intro to this video which is your instruction guide to making a TV news story;

I'll follow that with a piece from President Obama meeting with Republican Congressmen. Funny how much this is like a scene from The West Wing.

Meritocracy and Tea Party

On the back of all the news about the MySchool website David Burchell writing in the Oz has decided to have a vague over-all go at the idea of meritocracy.

An out-take provides a touch of the flavour of this piece;

The state system is struggling, and state comprehensives in unfashionable areas struggle most because their pupils' families are struggling too. And yet the social segregation between them and the other schools systems - public and private alike - grows a little with each pass-ing year. At my kids' school there are still legions of boys who believe that nimble hands and a knack for repairing broken things will send you on a solid path through life as a citizen, a wage-earner and a paterfamilias. Yet, as we know, without some vital piece of paper they are likely to be doomed to our contemporary social netherworld, the disability-pension list.

Breathtakingly he asserts the principle that the problem with selective schools is that they increase the gap to the comprehensive schools, without a scintilla of evidence that the absence of the brightest does anything other than affect the average. Will the presence of brighter kids in the comprehensive school increase the educational achievement of the remainder? Does it give them something to aspire to? Or does it make them feel even worse about their pedestrian performance?

But in the same breath he argues that we should recognise that book learning isn't everything and that "repairing broken things" is equally valid. And I ca assure the earnest author that there really are a host of real world things out there between a "piece of paper" and being consigned to the disability pension (and why disability rather than unemployment, what part of bias is it to assume the disabled aren't actually disabled).

The conclusion is equally inept. He writes, in part;

And yet the crying need of our schools sector has nothing to do with the interminable cold war between the public and private sectors as such. We need more schools with a wider range of social backgrounds among their pupils, and a wider range of role models on which potentially able pupils can draw. We need our state schools to become more independent - both in hiring and firing, and in developing and priding themselves on their school's ethos.

... In the end it's not school systems as such but the life-prospects of our young citizens on we should be focused.

And if this task, so simple in conception, seems at present impossibly difficult in execution - this is chiefly because it is confronted by that implacable combination of high-minded philosophy and low self-interest that drives so many of our highest goals and poorest achievements.

Okay so he declares his hand, the bright kids have to go to the comprehensive school to be role models for the not so bright. But how does this it with the idea that being bright shouldn't be seen as the only goal.

And the really bad news is that if you do come up with a state school system without selective schools, so everyone is coralled into the local school, and you then give these schools greater autonomy - or independence from the system - the most likely consequence is to amplify the effects of the socio-economic circumstances of the whole neighbourhood.

It remains the challenge for everyone who wants to use education as some kind of "leveller" that family circumstance makes a huge difference, and that kids from households in which "book learning" is already valued do more book learning.

Ask oneself deeper questions like the ones that emerge from the latest horror story from the UK of a couple of under-age (pre-teen) thugs.

But this does not mean that one needs to go the route of the "Tea Party" movement in the US. This is a weird mob, that had some role in the surprise result in Massachusetts, and subject of an article in the New Yorker. One member is quoted as saying the object to the government subsidising "the loser's mortgages". This is a group at the other extreme, that their priviledge is theirs and not to be messed with.

It is fascinating to see these people and what they think is the defence of freedom. At least at the time he wrote The Road to Surfdom, Hayek noted that while it was important to have freedom because no central planner could do a better job than the market in allocating resources to match preferences, he also counselled against hubris amongst those who weee well off. Hayek would be horrified to hear;

I work hard for what I have and I will share it with who I want to. Government cannot force me to be charitable.

As he noted the fact that one person was well of was as much about luck as it was about effort. The luck could be luck in obtaining abilities, or just in the coin falling the right way on a risk. Let's face it, selection processes in recruitment are not the perfectly scientific selection on merit they are made out to be, and the individual applicant has no control over who else decides to apply. In fact, I think Hayek might argue "if you chose not to be charitable, do not be surprised that Government steps in and decides to be charitable in your place."

An nteresting feature of the Tea Party is its self-organising nature. This confounds critics, as one Tea Party pundit says "If you listen to the Democrats, they’re completely convinced somebody’s in charge of all this." But it also reflects our need to better understand how social values evolve and are re-inforced. That's part of the story about those UK delinquents, and it is possibly the only story that might justify forcing everyone into the same "local school". It is just that the "network effect" could work either way - just like Gresham's law that "bad money drives out good" the negative values can overwhelm the good.

In fact there is a whole host of study on these effects in a whole host of fields that I don't want to go into now. But I will return to them. And when I do I'll return to Phillip Bobbit and Terror and Consent and making sense of the modern world. In making sense of the modern world we need to better understand that the technology of computation and communication that helped win the long war has fundamentally changed the dynamics of networks. Stuff gets communicated faster, global attitudes (and economic markets) can shift faster.

And then we have to realise that we really can't justify our presence in a program supposed to be about libertation and democracy in Afghanistan, if the price of doing so is to maintain a patriarchy.

Welcome Back Breakfast Politics!

Gerard Henderson in his Media Watch Dog has noted that a number of media types have returned from their WEB. He notes that it seems to only be media people who get "Well Earned Breaks" - while the rest of us take vacations (or holidays - but they usually extend beyond the religious festivities and are shared by people of all, and indeed no, faith).

One back today is Breakfast Politics which is an easily digested precis of all the political news, and a blogger's dream! Christine Wallace who composes it took a particularly long WEB - basically the same as the pollies. I suspect she may have been busy finishing a thesis though.

And there is a lot to read today, mostly about the new political year, and what a friend calls reporting politics as either a "horse race or celebrity." The question the media asks is not what Tony Abbott stands for but whether he can sell himself. (This is a segue to a posy about "metrics" that I need to make). Or, its the"celebrity" piece of Tony, Paris Hilton-esque, photographed in his swimmers.

But I want to ignore all that and just note two pieces of "'der' journalism". This is my term for when a newspaper reports something as if it is breathtaking news that isn't.

The first is a report of research by Choice that suggests that consumers don't get much out of supermarket loyalty programs. It notes, as if this is news, that "schemes used by Coles and Woolworths offered less than a $1 return from every $100 spent". So let's be clear, they are telling us the loyalty schemes don't amount to a 1% discount. Did we know that? Well, yes because the terms and conditions are pretty clear.

The pity is that that is no reason to avoid them as a shopper. You see, if you are the only shopper not on the scheme you are the only person not getting the discount. Now the purpose of the loyalty scheme isn't to reduce profit, so the "benefit" of the scheme must be funded by the other shoppers. So as the only person on the scheme you would be funding everyone else. Of course, if EVERYONE joins the scheme, no one is funding it - but then again in the long run no one is paying the list price either. The you get to what could be called the "jewellery store syndrome" where everything is always on sale below a barely existant list price.

The second story suggests that medical training "fails to prepare" new doctors. It goes on to suggest that medical supervisors find interns skills "fall below expectations" and that surveys of final-year medical graduates show that only about a third think they know adequately how to treat wounds and calculate medicine dosages. Hello! The reason we require the new grad to go spend two years in a hospital under close supervision is because you simple can't learn all this stuff from book learning with a few practicums. Even once you get through that now you need a further two year training program to be a GP.

Possibly more worrying s the fact that a third of final-year students might be over cocky about how much they do know. (And equally worrying is the delusion of the medical supervisors that they were any better prepared than the current crop when they emerged from University.) Medicine isn't simple. The only way to better prepare the final year graduates would be to lock them in University longer. Far, far better that they get out and learn on the job under close supervision.

There are other interesting stories this morning - let's see if I can link other completely different stories in another semi-coherent blog post.