Tag Archives: #government

New Labor?

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At the time of writing, ballot papers in the recent Australian Federal Election are still being counted. Although it is clear that the Australian Labor Party (ALP) has secured more seats in the House of Representatives than any other party, and its leader, Anthony Albanese has already been sworn in as the new Prime Minister, the ALP is yet to establish an overall Parliamentary majority – although it is highly likely they will.

While the final results are still to be tallied, it’s fair to say that this Election has been like no other, and the ALP will need to find a new style of Government, given the following facts:

  • Albanese is only the fourth Labor leader since WWII to lead the ALP to Government from Opposition – given the fixed three-year terms of Australian Parliaments, this is an achievement in itself;
  • The ALP secured less than 33% of the national primary vote (compared to the outgoing LNP Government’s 36%); this means nearly one-third of first preference votes were divided between the Greens, Independents, and other minor parties, and in theory breaks the two-party stranglehold on Federal politics;
  • The two-party preferred tally shows a remarkable similarity to the Brexit Vote: ALP 51.7% vs LNP 48.3% (Brexit: Leave 51.9% vs Remain 48.1%) – which might suggest a less than an overwhelming mandate for the ALP;
  • Candidates for the so-called “Teal Independents” secured more new seats than perhaps even they expected, and will form the largest group on the expanded cross-bench;
  • The Greens won three new seats, all in Queensland, which is surprising given the party’s stand on the mining, coal and gas industries;
  • Although Katter’s Australian Party retained its solitary member in the House of Representatives, neither of the other Queensland-based, right-wing parties (One Nation and the United Australia Party) picked up any lower house seats.

These election results have also highlighted (even exacerbated?) the differences that exist between regional, metropolitan, and suburban areas (both within each State and nationally) that represent significant fault lines across the Federal electorate.

Even if the ALP manages to secure a majority in the House of Representatives, the incoming Prime Minister has acknowledged the need to engage more with the cross-bench than previous administrations – in particular on climate policy and the establishment of a Federal independent commission against corruption. (And in the Senate, the ALP will likely be reliant upon the Greens to pass legislation.)

On climate policy, the main debate is on achieving lower targets for carbon emissions, how to do it, how soon, and at what cost. The biggest challenge will be on transitioning the mining, coal and gas industries (especially in Queensland and Western Australia), and on tackling the heavy polluters (in particular, energy generation, construction and agriculture). Given that both Queensland and Western Australia are under Labor Governments, and that these industries are heavily unionized compared to most other sectors of the economy, perhaps the Prime Minister will find it comparatively easy to sell his Government’s policies – but bringing the rest of the population with him will be key, and there needs to be a clearer path to decarbonizing the economy, including incentives for change.

Regarding a Federal anti-corruption body, the challenge will be to draw up practical and consistent terms of reference (especially given that such bodies already exist in some form or other at State level). For example, in addition to elected representatives and civil servants, should a new Commission have oversight of political parties, charities, unions, non-for-profits, industry associations, professional sporting codes, non-government bodies and anyone else that receives any sort of public funding? And what about whistle-blower protections and the public’s right to submit a complaint or other matter for investigation? How will it deal with freedom of information requests that appear to be denied on political grounds, or manage the transaction of investigations that may involve multiple parties? And should such a body have oversight of truth in political advertising or deliberate misinformation campaigns by those running for public office?

A glaring omission from the Federal election campaign was any meaningful debate on the need for structural economic reforms. Many of the published policies were heavy on how much funding would be allocated to favoured industries and pet projects, but they were very light on evaluating expected outcomes or measuring the quality of results. The only financial topics to get regularly aired were wage growth, inflation, interest rates, and incentives for first-time home buyers – all of which may be important, but they are largely “more of the same” that we have seen for the past 20 years of tax-based tinkering. Not since the introduction of GST (sales tax) in 2000 have we seen any significant policy implementation, and certainly nothing like the major economic reforms introduced by the Hawke/Keating administration. To be fair to the Greens, they did advocate new taxes to fund some of their carbon-related policies (including nationalising part of the renewable energy sector) but I don’t recall seeing a specific cost analysis or balance sheet on how they would achieve their goals. There are also tensions emerging between the need to bolster wage growth (off the back of improved productivity, which hopefully includes removing archaic restrictive practices and encouraging further competition?) and the need to address growing skills shortage (to be partly offset by increased immigration, without risking wage deflation?). Any discussion of the economy must also recognise the realities of the changing work environment, including new technology, remote working, casual employment and the need to encourage innovation and sustain the small business and start-up ecosystem.

Finally, if the Prime Minister is going to be successful in selling his vision of “New Labor” (my term) then he will need to:

  • ensure that the ALP does not again disintegrate into factional party warfare and rolling incumbent leaders that plagued the previous Labor administration (and which was adopted with equal gusto by the outgoing Coalition);
  • steer a renewed path to economic modernisation begun by his predecessors in the 1980s and 1990s;
  • embrace new technology and change the way public sector IT procurement is conducted;
  • acknowledge that the Government (featuring, as ever, so many career politicians who lack direct experience of working in industry or running commercial businesses) doesn’t know all the answers – but they know how and where to find them;

And while it’s not the Prime Minister’s job to actually “hold the hose”, he does need to make sure those who do are competent to do so, and that he and his Government will hold themselves, their appointees and their representatives directly accountable to the electorate.

Next week: Renzo Piano & the Centro Botín

 

 

Federation. Is. Broken. Surely?

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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

 

 

 

“What Should We Build?”

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Over the past week, the Leader of the Federal Opposition has been asking a series of questions on Twitter and elsewhere, about “what should Australia be building?”. As well as building the foundations of Labor’s Federal Election policy platform for boosting jobs in the manufacturing sector, it also provides lots of photo ops for pollies in hard hats and hi-viz clothing. (I do wonder why the potential Prime Minister hasn’t thought of this idea before, or why he appears to not know the answer – isn’t that his job? It also makes me wonder whether we need Parliament anymore, since our elected representatives prefer to conduct their “debates” via Social Media and Press Conferences…. it would save a lot of time and money!)

By this time next year, Albo could be PM (Photo sourced from Twitter)

There has been no shortage of suggestions from the Twitterati, which fall into the following main categories:

  • Renewable energy
  • Trains
  • Trams
  • Ferries
  • High-end engineering

But there has also been commentary around Labor’s ambivalence on the coal and gas sector (especially in the key state of Queensland), and the irony that we export cheap raw materials and import expensive finished goods. Then there is debate on the amount of local manufacturing content that already exists in Australia’s state-based trains and urban trams/light rail systems (skewed by the question of local vs foreign ownership). Plus, there’s the thorny issue of high-speed inter-city trains…

As I commented recently, the manufacturing sector accounts for fewer than 1m local jobs (less than 10% of the working population), and 6% of GDP. It has been declining steadily as a contributor to GDP since the 1960s, and more rapidly in recent years since we abandoned key subsidies to the car industry. I don’t think anyone is suggesting we return to the days of metal bashing and white goods. And while we’ve got to be selective about the type of manufacturing base we want to to develop, we also have to be realistic about the manufacturing capabilities we want to encourage and enhance.

The latter involves developing transferable skills, creating interoperable production lines, deploying modular designs and inter-changeable components, and recycling/repurposing. All of which should mean we don’t need to make every part of every item domestically, but we know how to assemble, service, maintain, repair and replace goods locally, and we can focus on adding value that can be fed back into the supply chain, which in turn can be exported (via know-how and services). Australia has some decent research and development capabilities, but we are not always very good at raising domestic investment, or commerciliasing our IP (so this value ends up being transferred overseas, with little to no return accruing locally).

I’m not a huge fan of simplistic “buy local goods/support local jobs” campaigns, or local content quotas. The former can degenerate into trade protectionism and economic nationalism; while the latter tend to favour inefficient incumbents within cozy duopolies (see the broadcasting and media sector). The current debate has also raised questions about procurement policies, and I for one would welcome a total revamp of government IT purchasing and deployment at Federal, State and LGA levels.

There’s also the consumer angle: Australians are notoriously “cost conscious”, so will they be prepared to pay more for locally-made goods, even if they are better designed, well-made and energy efficient, compared to cheaper, less-sustainable imports? (This is also linked to the question of wage growth and restrictive trade practices.)

The recent pandemic has highlighted some challenges for the structure of the local economy:

  • Disruption to distribution networks and supply chain logistics
  • Food security
  • Energy self-sufficiency
  • Inability to service equipment locally or source spare parts
  • Different standards across the States
  • Medicine and vaccine manufacture, sourcing and distribution

For an up-to-date perspective on where Australian manufacturing policy needs to be heading, I recommend taking a look at the Productivity Commission’s latest submission to a current Senate enquiry. (Am I alone in thinking that the PC, along with the ACCC, is doing more to develop and advance economic policy than our elected representatives?)

The PC’s submission addresses a number of key points:

  • R&D incentives are hampered by complex tax treatment
  • Policies (and subsidies) favouring one industry create uncertainty for others
  • Need for IP reform (especially “fair use” of copyright)
  • The National Interest test needs clarifying
  • More effort on up-skilling through more relevant education and training
  • The role of manufacturing capabilities in supporting supply chain infrastructure

Finally, while I agree that there needs to be some focus on renewable energy and public transport, we should not ignore food and agriculture, bio-tech, IT, automation, robotics, materials science and other high-end capabilities in specialist design, engineering and recycling (including reclaiming precious minerals from obsolete equipment).

(And did I mention the “Innovation Agenda” and the revolving door at the Federal Ministry?)

Next week: Dead Pop Stars

Is Federation still working?

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As three of the six Australian States (and one of the two Territories) grapple with fresh COVID outbreaks, their respective lock-down measures reveal quite different responses to what should be considered a common problem. It’s not just the differences within their own borders, but also how they react in relation to each other in terms of classifying “hot spots” and imposing travel restrictions. It’s a fresh example that despite defining itself as a single nation, the Commonwealth of Australia remains a patchwork quilt, hurriedly stitched together from the remains of colonialism, under the pretext of “Federation”.

Federation feels even more of an artificial construct than the former British colonies themselves. In my view, the inconsistencies between each State and Territory in dealing with COVID, and their fractious collective and individual relationships with the Commonwealth, can be linked to questions of national identity, the legacy of imperialism, a lack of consensus on a Treaty with our First Nations people, and the failure of Republicanism to pave a way forward.

For a start, Australia tries to maintain four different codes of professional football – yet not every State or Territory is represented in the national competitions. Of these codes, one is essentially a Victorian competition, with a couple of other States brought in on merit, and a couple of the others only included after some fabricated interstate franchises. (And how long before a Victorian club has to relocate to Tasmania?)

Another football code runs an interstate competition, but only two States compete – and sometimes they compete in another State (just for the hell of it, or to try and instill “national” relevance?)

Cricket may rightfully claim to be a national sport at a professional level, but even the major Sheffield Shield competition excludes the two Territories.

These observations may appear flippant, but in a sport-loving nation, such examples might help explain why we don’t feel a very cohesive place – not all of us even get to barrack for our own State or Territory on the playing field!

There are many other examples of arbitrary differences between the States – e.g., unicameral or bicameral Parliaments; recognition of Public Holidays; the calculation of State election dates; the width of railway tracks; connectivity with energy grids; the minimum legal age for driving a car; the size of beer glasses in pubs; and the term for a “corner shop”.

Back in 1901, Federation must have felt like part of a grand scheme towards a modern era, designed to galvanize a bunch of colonies into a cohesive whole, and forge a new nation. But we don’t formally celebrate its existence with a public holiday. Rather, each State prefers to mark the Queen’s Birthday (albeit on different dates…) instead of recognizing the Act of Federation, which was supposed to confirm Australia’s independence from the UK. Not only that, but the “National Day” we do observe is Australia Day, which is highly contentious and increasingly overshadowed by its association with foreign invasion, imperial expansion and colonial oppression.

Back to COVID: recent events have shown that the “social contract” between the Commonwealth of Australia on the one hand, and the States and Territories on the other, is purely transactional. In respect to the pandemic, the Federal government has had two primary responsibilities: 1) international border control and quarantine; 2) vaccine acquisition and distribution. Although they have maintained closed borders, the Commonwealth has “delegated” quarantine arrangements to the States, with all the resulting inconsistencies and glaring mistakes. The Commonwealth has also fudged the vaccination roll-out (too many reasons and causes to go into here).

On the need for dedicated quarantine centres: while the States have taken on (or been lumped with) an unenviable task, after 18 months of the pandemic, I don’t understand why the States haven’t taken it upon themselves to build their own facilities, and then stick the Federal Government with the bill. If landlords won’t undertake essential property repairs when brought to their attention, I think most of us would agree that their tenants would have a valid case for getting the work done themselves and deducting the cost from the rent.

Except that the States don’t have that sort of leverage over the Federal Government (despite what Queensland and Western Australia might say and think).

In short, Federation is merely a way to distribute taxes levied by the Commonwealth – even then, this distribution is mired in political horse-trading and pork-barreling. The States, unable to raise their own revenue (other than via payroll tax, stamp duty, land tax and fees from providing certain services, issuing permits and granting licenses), are heavily reliant on Federal handouts. While this allocation is often dressed up in the guise of achieving minimum targets and standards, in reality funding is tied to political objectives.

I suppose even after 120 years, Federation can still be called a work in progress. Whatever the future debate on Australia Day and an indigenous Treaty (plus constitutional recognition and parliamentary representation), and whatever the prospect of a Republic, we may need to consider that the States, as currently constituted, have had their time and are increasingly redundant. Part of me thinks we might be better off by dissolving them (along with our local authorities) and re-constituting regional government and administration around the lands of the original settlers to this island. Just a thought.

Next week: Startup Vic FinTech Pitch Night