Gratitude and the Great Recharge

As I ease myself back into regular blogging following a summer hiatus, I’d like to begin by expressing an enormous sense of gratitude.

Last November, when I mentioned I was taking a break from blogging, I was pleasantly surprised by the number of readers who contacted me to check I was OK, several of whom let me know how much they appreciate reading my posts. To each of them (and they know who they are) I am extremely grateful. It’s that level of connection and feedback that helps to make the effort worthwhile.

One of my objectives in going offline for a few weeks was to take stock after nearly two years of disruption, and come back refreshed and re-energised. Like many other people, I was feeling drained and demoralised after multiple lockdowns, extended social disconnection, pitiful political failures, and increasing verbal (and physical) assaults on our notions of liberal democracy. I badly needed a change of perspective.

I was trying to come up with a suitable tag to summarise this goal, and realised that so many terms I thought of have come to be associated with pejorative meanings: the Great Reset, the Great Awakening (or Awokening, depending on your viewpoint), and the Great Resignation were among them.

So instead, I landed upon the Great Recharge.

For me, it evokes a physical energy boost, as well as a mental reframing on how to reflect on the past two years, and identify a way forward. The latter is about more than developing a coping mechanism. It is about retuning my responses to the information we are bombarded with – daily news, social media, advertising, propaganda, mis- and dis-information – and not letting it annoy me or provoke me. Because that is the reaction that the protagonists are looking for, and many of them are not being honest about their agenda, their vested interests, or their sponsors and backers.

As a result, I am trying to block out what is unimportant (not worth the effort of engagement), and not worry about those things I don’t have any immediate control over. By prioritising what really interests me, I feel I can be more creative, positive, enthusiastic and energising. Hopefully, I can be more connected to what really matters (and in the end, focus on what gives me joy). That way, I believe I can create less stress and inflict less emotional damage by not perpetuating the negative energy generated by protagonists who only want their audience to rise to the bait.

If I don’t like something, and as long as I’m not being forced to watch, read or listen to it, then I can simply choose not to give it air time. (“If you can’t say something constructive, it’s better to say nothing.”)

It’s not always easy  – look at all the trash talk, sledging and character assassination that permeates politics, sport, academia, culture and media. It’s pervasive, corrosive, and debilitating – and what makes it worse is that most times, the perpetrators are being paid to bad mouth the targets of their bile. Perhaps we can take a lead from Rafael Nadal, and let the ball do the talking….

Next week: Startupbootcamp Virtual Demo Day – Decarbonize

Federation. Is. Broken. Surely?

Why don’t we celebrate the Australian Federation? Logically, it would make more sense to mark the formation of the Commonwealth of Australia (January 1, 1901), rather than the highly contentious Australia Day (January 26). The former offers the notion of nationhood and a sense of progress; the latter is tainted with invasion and colonization.

Part of the problem is that we don’t really believe in the Federation (or more likely, we don’t understand or know enough about it). Queensland and New South Wales were initially cold to lukewarm about joining the Federation, and Western Australia only came around once the Constitution Act was passed in 1900. (There’s even a argument to suggest that New Zealand may have joined the Federation before or instead of Western Australia, but I’ll leave that to the historians.)

More significant is the fact that the past two years have revealed considerable cracks in the Federation. States have been taking very different approaches to the current pandemic, with both Western Australia and Queensland at times acting as if they had already seceded. We’ve seen huge inconsistencies in how each State and Territory has responded to Covid – there was little to no national consensus on defining “hot spots”, “red zones”, “clusters”, “complex cases”, “mystery cases” or “close contact”. The respective public health measures and administrative responses were also very different, leading to confusion, frustration and anger over external and internal border controls, hotel quarantine, home isolation, track’n’trace, density limits, social distancing and vaccine roll-out. Overlay that with cack-handed management by the Commonwealth itself, and it’s easy to see why many people feel no love for Federation.

The former Premier of NSW let the cat out of the bag when she referred to “our New South Wales citizens”. Last time I looked, Australian citizenship is conferred at the Federal level, not by individual States or Territories. This Freudian slip just confirms the many fault lines that exist as between the Commonwealth and the States, and as between the States themselves. About the only thing that unites Australians is when a national sports team is competing at international level…

In fact, there are many areas of public policy, administration and infrastructure where the States and Territories adopt different standards and models – for example, we don’t yet have a fully integrated national energy grid, daylight savings results in five different time zones during summer (as opposed to the three during winter), and there are differences in parliamentary structures (bicameral vs unicameral) and election cycles.

The issue of Federation is also fraught from a financial and budgetary perspective. States and Territories have limited options for raising their own revenue, namely payroll tax, land tax, stamp duty and licenses. While they can generate revenue from commercial ventures such as public-private infrastructure projects (and from mining and resources royalties), the bulk of their funding comes from the distribution of Federal income tax and GST (sales tax). (Or they borrow in the public debt markets.) And of course, there is always some aggro on these allocations at COAG meetings (now known as National Cabinet….).

It might also be the case that just as we have too many professional football codes (none of which are truly “national”), we have too many layers of government for a population of just 25 million people (Federal, State, Local). Given that Local Government is not actually provided for in the Constitution, and given the antagonism between States, perhaps there is a case to be made for change. Most people live within a few coastal conurbations. Moreover, many people identify closely with their city, region or rural locality, even more so than their State. Think of border twin towns such as Albury-Wodonga on the River Murray and Tweed Heads-Coolangata on the East Coast. So, why not abolish the States and Territories (as well as dismantling the current local government structure), and instead establish functional municipal, regional and rural governments that are more representative of their local communities, and which are charged with distributing resources and coordinating public services on behalf of the Commonwealth (especially in the areas of health, education, welfare and transport).

One thing is certain: Australia needs to sort out the Constitution before it can re-visit the idea of becoming a Republic. Apart from the issue of a Treaty for indigenous recognition and native title land rights (and resolving the anomaly that is Local Government), the structure of our political institutions also needs reforming. Having Federal elections every three years reinforces short-term policies. Consider also the negative impact the current state of the party political system has on the quality of policy debate and implementation. Look also at the wonky versions of proportional representation we have in the form of single transferable votes and dodgy preference deals, plus Senate party slates and “Captain’s picks”.

This all means that even though we may think we are voting for individual candidates to represent our interests in Parliament, we are in fact voting for party machines. Those party structures are rife with factional warfare, internecine disputes, branch stacking and shady backroom deals – hence, we don’t directly vote for the Prime Minister (who can be rolled by their own parties, as we know to our cost), and we can’t hold our constituent representatives accountable except at the next Federal election.

Even if we acknowledge that we are voting for a candidate based on their stated party allegiance, there is no guarantee that they will vote (or even stay) with that party, so we don’t get the representation we voted for. Add to the mix the continued problems with party donations, campaign funding, Parliamentary lobbying and electoral pork barrelling, and it’s no wonder we have given up on the party political system and have lost all respect for our elected representatives and their party leaders. Plus, the perpetual rent-seeking from entrenched vested interests (coupled with monopolistic institutions and cozy industry duopolies) means there is inertia in favour of this status quo.

The proposed model for a Republic seems to be predicated on having a President as the Head of State (to replace the British monarch and their local representative in the form of the Governor-General). Beyond that there seems to be little agreement on how the the President will be appointed, or what Constitutional and/or political powers will be vested in them. Recent proposals for a nomination and election process have been met with both support and opposition from former Prime Ministers. But until we define what role the President will perform, we can’t begin to think about the process for their elevation to the position.

For example, is the Presidency going to be a mere figurehead, with no decision-making authority apart from confirming the Will of Parliament? Should the President be directly elected via universal suffrage, under a single, popular vote and “first past the post” method (rather than via a fudged proportional representation model? If we have an electoral college system (as in the USA), who gets to participate, how are they appointed and how do they get to cast their votes? How long should the President hold office? Is the Office of President designed to “keep the bastards honest” in Parliament, or to intervene when the Parliamentary party system breaks down, or to sue the Commonwealth on behalf of affected citizens when the Constitution is breached? Will the President have any role in forming public policy, or negotiating international treaties? Or will the President be voted in under a popularity contest, and as a reward for past public service, kind of like a plebiscite for Australian of the Year?

Another thing may also be certain: the timing (and likelihood) of Australia becoming a Republic will depend on the politicians of the day, how they advocate for it, and the model they propose. Because wrongly or rightly, the form and substance of the Republic will be linked to the character of the Prime Minister who has to invoke the necessary Constitutional reforms, and the nature of the Government they lead to implement it. Which is a large reason why the Referendum on the Republic failed last time – the proposed model was not clear enough to the electorate, and Australian voters may have feared the outcome would result in a President who did not represent them, or who did not reflect the choice of the people. A bit like our recent run of Prime Ministers, and the revolving door at the Lodge!

Next week: Gratitude and the Great Recharge

 

 

 

Summing Up (and Signing Off)

This will be my last blog post for the year. I’ve decided to pull up stumps a little early ahead of the summer holidays and festive season, because quite frankly, after the past few months I need a break.

Cyril Lancelin’s “The Knot” at Melbourne’s Federation Square – one of many public events that were short-lived thanks to lockdown

First, there was the three-month lockdown in Melbourne, and the sixth overall. This has put us firmly in the lead for the world’s longest cumulative period of lockdown, and even now, ongoing restrictions remain.

Second, the co-working space of which I have been a member for nearly three years has been put into voluntary liquidation. So I’m currently looking for a new “home” – although I’m not in a desparate rush, given the time of year.

Third, although we are less than two weeks away from the start of summer, winter has returned, bringing an extended period of cold, wet and windy weather. Whatever the cause, it’s definitely evidence of a change in climatic conditions (and has put a dampener any prospect of “opening up”).

As regular readers will know, inspiration for this blog comes from a variety of sources: meet-ups, conferences, exhibitions, networking events, international travel, live music, etc. All the stuff that I have taken for granted for so many years, and most of which has been severely curtailed (if not suspended) for the past 20 months.

While these activities are beginning to return, it’s far from “business as usual” – and the traditional summer break will mean a prolonged resumption of normal service.

So, all in all, it seems like an opportune moment to step back, re-calibrate, and hopefully return in the new year with some renewed energy and impetus.

Thanks for reading.

Next time: TBA

 

Is crypto finally going mainstream?

Just as my last blog on crypto regulation went to press, news broke that CBA (one of Australia’s “four pillar” banks) will be adding crypto assets to its mobile banking app. Add that to the launch of a crypto equities ETF by BetaShares, and further media coverage of local digital asset fund manager Apollo Capital, and you may start to believe that crypto is finally going mainstream in Australia.

But, before anyone gets too excited, a few caveats are in order.

First, the recent flurry of announcements from the Australian Senate, ASIC and AUSTRAC are simply the latest stages in a long-running debate about how crypto assets should be regulated, serviced and distributed. Despite these positive noises, there is still some way to go before crypto reaches critical mass (even though data for Australia shows we have one of the higher rates of market adoption).

Second, there is a lot of noise out there, and not all of it here in Australia. The SEC, FATF, ISDA, Cboe and SGX are just a few of the institutional voices making announcements on crypto and digital assets in recent weeks. On top of that, of course, there is the President of El Salvador (and the Mayor-Elect of New York) weighing in on behalf of the politicians. Some of this commentary is mere posturing; some is about being seen to be doing something; and a large part is just the legacy markets trying to catch up (and hoping to take control?).

Third, a closer look at CBA, BetaShares and Apollo Capital reveal some significant limitations in terms of what their products actually offer:

The CBA is planning to launch a trial among a small sample of their mobile banking users (although, no doubt, if things go well, it will be rolled out more extensively). But it does not mean the app becomes a fully-fledged crypto wallet: customers will only be able to buy/sell crypto within the app, and they won’t be able to send crypto to third parties. Plus, only a small set of crypto assets will be available.

The BetaShares ETF is not offering direct exposure to Bitcoin or other crypto assets. Instead, the fund is designed to invest in companies (mainly crypto exchanges, miners and technology providers) that are significant or strategic industry players. While that may mitigate the market volatility (and price fluctuation) that crypto experiences, it doesn’t necessarily make for higher returns.

The Apollo Capital fund is only available to wholesale or accredited investors – not retail customers. And while Apollo has done a reasonable job of growing its AUM, I don’t believe there are any major allocations from Industry Super Funds (which manage 27% of Australians’ retirement savings), Retail Funds (21%) or Public Sector Funds (18%). And despite anecdotal evidence that Self-Managed Super Funds (SMSF) are more active in crypto assets (along with Family Offices and HNWIs), recent data from the ATO suggests crypto assets held within SMSF are not much more than $200m.

Having worked in this industry since 2016, it’s always been apparent from an institutional perspective that few want to go first, but nobody wants to be last, when it comes to launching crypto products and services. Of the three Australian stories this week, the most significant is probably the CBA; it certainly got a lot of attention at the recent State of Play presentation by Blockchain Australia, in large part due to the industry implications, and how it will help bring crypto to an even wider audience.

Next week: Summing Up (and Signing Off)