Budget '09 Roundup

Every year my best friend (who shall be, from here on, referred to as "C4") and I get together for a special event. One year, as there was no television at my house, he drove a television over to my house, in the car, especially.

No it's not the State Origin, or the World Cup (der, obviously - that's on every 4 years... isn't it?).

It's the budget. That's right, we get together... to watch... the budget.

As the major and most publicly anticipated political event of each year - we both find an embarrassed nerdy pleasure in making the time to watch it.

The main frustration in previous years has been wanting to comment in the middle of the speech - and rewind in order to catch details. This year (along with the beer, wine and cashews) I came to the party armed with note-pad and pen, so I could jot down points of interest without interrupting the flow of the speech. I needn't have bothered, however, as, low and behold, this year C4 brought his DVD recording system to the party so we could pause, discuss and rewind - what a revelation! Someone should tell someone... I don't know... maybe, sports fans, or something, might like this kind of thing too.

Every year I am inspired to write a roundup. So this year...

On top of this, however - C4 was kind enough to point out the discrepancy between the name of my blog and the regularity with which it's updated... perhaps my "ramblings" have not been quite as "incessant" as I would have hoped...

What better time to pick up the pace with my posts again!

So now, for the roundup:


The Roundup


Initial Thoughts

So - once you get past the contemporary need for a "catch phrase" or a sound bite:

"and tonight's budget is brought to you by the expression 'Nation Building for Recovery'"

the first issue with this budget is the fact that it was billed as a "tough budget". In his opening preamble, Wayne Swan says that "economic leadership is about making the tough decisions, no matter what the political consequences might be".

That may be so - but if it is, then this budget does nothing to prove Labor's commitment to economic leadership. Quite the opposite - they have obviously made some less "tough" decisions in order to minimise the political consequences in their most contested constituencies, and other "tough" decisions have been made precisely because there were no political consequences to speak of.

Yes of course - expecting politicians not to be political is like [insert drole comparison of two oxymoronic concepts here]. But still, to claim the actual decisions within this budget as anything approaching "tough" is simply taking the piss. Wayne Swan claimed that "We couldn't raise the pension without hard choices elsewhere" - but apparently... he has.


Pension Payments

• Increase in withdrawal rate
• Increase in qualifying age
• Decrease in super concessions (some temporary)
  

for pensioners; all of these things are savings. But they could hardly be defined as "tough" or "hard choices". All of them are outweighed by increased payments to singles and couples.

Now, don't get me wrong. I support all of these measures. All of them seem fair and right. Or, at least, more fair than the previous system. But none of them should be defined as "tough".


Paid Maternity Leave

All this talk brings me to one of major problems in this budget - the plans for paid maternity leave.

Let's look at some of the big numbers:

• $22 billion - Infrastructure
• $4.7 billion towards a $43 billion PPP Broadband Network
• $5.3 billion - Tertiary Education

Amongst all of this, the government has made one of their "tough" decisions regarding paid maternity leave and postponed it for 18 months.

Now the TOTAL spend over 5 years for the introduction of a Paid Parental Leave system is $731 million - and yet the government sees the need to postpone this until after the next election.

The savings are minimal, and yet the potential cultural benefit so great.

Lets make this clear - we are in a club of 2 (along with the US) as the ONLY OECD countries who have no paid maternity leave. If they were worried about the effect on job security, in a time of economic downturn - they could have found a little extra ($731 million isn't much compared to the rest of the budget) to compensate (small?) businesses for some of the extra costs involved in back-filling staff.

The last thing we want to encourage people to do right now, is to hold off on having more children - and yet that's what this decision does. It's a small price for a great gain - and there's no reason, in my mind, to hold a carrot to the electorate and say "vote for me again - or you might not get paid maternity". In fact I find that insulting.

Does the Rudd government believe in it as a policy or not? Not enough to introduce it - apparently.

You could imagine that this might push some of the Labor faithful towards voting Green... and amazingly enough, this shift is borne out in the latest poles - where Labor have lost 5 or 6 points, and the majority of them have been picked up by the Greens.

"But wait", I hear you cry, "didn't you say the problem was the budget isn't tough enough? Isn't that at least a small saving for tough times?"

And this brings me to to my comment for the budget as a whole.


The Big Problem

The problem with this budget is not the fact that it isn't a tough budget.

The problem for this budget is that it was sold as a tough budget.

In trying to come up with some good "tough" measures that the government could have introduced at this budget - I came up with nothing.

The problem is, anything broad-based enough, tough enough and big enough in total value, to actually be defined as "tough" is, at the same time, dangerously deflationary. And deflation isn't a game we want to risk getting into in this climate.

The truth of the matter is, we missed the opportunity to save as much money as we should have, under the last government. They gave it all back in tax cuts, which were an inflationary measure in boom times. Now we're stuck trying to avoid deflationary cuts in bad times.

It's much like the frustration with the first Swan budget.

There wasn't actually enough difference between the Rudd government's position and the Howard government's. While still in boom times, the Rudd government handed back most of the boom time money in personal tax cuts (only slightly less tax cuts than the Liberals wanted to introduce - but let's take a moment to imagine how much worse the current budget would look if we had introduced the Liberals tax cuts).

So... the problem isn't that this budget isn't tough enough - on the contrary... we need to admit that, what we don't need right now is a tough budget. We need to support spending in key areas - in order to avoid deflationary pressures. And we need to (which this budget does) plan to pull back on that accelerator once things are looking good again.

I actually support much of what this budget puts in motion.

After a period of short-term injections, we now need some medium-term plans to increase productivity and support jobs.

There's money for Health and Education and some areas of Social Security (interestingly not Unemployment or Single Parents).

But - in holding off on introducing the Paid Maternity Leave measures until after the next election, the Rudd government has snubbed its nose at its heart-land voters. The argument, presumably, is "well, who else are they going to vote for?".

The Greens? Well, again, Labor may be hoping that all those votes will come back to them in preferences. And they may well be correct.

But - after years of barracking for Kevin Rudd, in response to this (and his last) budget - my current hope for the next election is that we can find dense enough collections of "Left swinging" voters to make a real splash for the Greens.

For some reason (call me naive), I still believe the Greens will push through policies that represent their core constituencies, and not just the people who might be swayed at election time.

This wasn't an "election budget" - that's coming next time. Rudd will have to do a lot more "voter pleasing" next year. This was his opportunity to introduce some real and valuable "Labor style" policies - and, from my perspective, he missed it. I understand that you need to stay in power - but if you don't take the opportunity to introduce some strong policies when the opportunity is there, what's the point in being in power at all?

Unless of course, he thinks this is an election budget? Just how much does he predict we might be heading for a double dissolution...? Hmmmm...


References:

• Transcript of the 2009-10 Federal Budget, second reading

Kevin Rudd on Funding for the ABC

Half way through March last year, I wrote to Kevin Rudd - the, then new, Labor Leader - about funding (or the lack thereof) for the ABC... your ABC.

He wrote back.

Well, someone from his office, with official access to his email wrote back, anyway.

He (or they) did the classic politician's thing of rewording the answer to suit the question he wanted me to ask. Some of his response is about the process by which the ABC board is stacked. To be honest, I think this is an important issue as well... and I agree with Kevin Rudd's assessment of the situation. It makes my original letter sound more broad ranging than it actually was, which is fine by me.

Click here to see a list of the statistics on funding for the ABC that I sent in my letter to Kevin Rudd.

Not only did I get Kevin to say he thought the ABC was underfunded, he actually mentioned a figure ($100 million), which is more than I ever expected to get in response to my original letter (not the amount, but the fact that he mentioned a specific figure at all).

I realise that there is little chance of the government announcing extra spending for the ABC in this up-and-coming "tight" budget, on May 13 - and, to be honest, Mr Rudd does say "over the next triennium", so he's got a full 3 years to come good on his offer here. (Isn't that now quartennium? What happened to Kevin's promise to make Australian political terms a fixed four-year affair... I should do a post on that sometime soon...)

Here is the email I got, from Kevin:

Dear Nicholas

Thank you for your letter highlighting the importance of adequate funding for the ABC and the need for the ABC to be free from political interference.

Labor shares these principles.

The Howard Government has starved the ABC of the funding it needs to produce decent public broadcasting services. After coming to power the Howard Government cut ABC funding by $66 million over two years. This funding has never been fully restored. In real terms, the ABC has less money to make programs than when John Howard came to office. As a consequence, the production of Australian drama has fallen to record lows.

The Howard Government has also has repeatedly sought to stack the ABC Board with its political mates.

Labor is deeply concerned with the Howard Government’s attempts to bully the ABC and undermine its independence. This is a worrying threat to Australian democracy.

Labor is committed to ending the practice of Governments making political appointments to the ABC Board. Under Labor, appointments will be based on merit, not mateship.

Since 2003 Labor has argued that there should be an open and transparent process for making appointments to the ABC board. Vacancies should be advertised and there should be clear merit based selection criteria. Labor's policy provides for an independent selection panel to undertake a proper shortlist selection process.

Most importantly the selection of the shortlist would be independent of the Minister. If the Minister does not appoint a short listed candidate he or she will have to table a formal statement of the reasons for departing from the shortlist to the Parliament.

This process will make it virtually impossible for a political crony to be short listed for an ABC Board appointment.

Labor's policy will enhance our democracy. It will foster an environment where the ABC can be fearless in its approach to news and current affairs, and critical of both sides of politics whenever necessary.

Labor is committed to a better, stronger and independent ABC. During the last election campaign, Labor pledged to begin to restore the ABC's finances by injecting an additional $100 million over the next triennium. Labor will review the funding requirements of the ABC in the lead up to the next election. ABC must be properly funded so that it is able to fulfil its charter to inform, educate and entertain all Australians.

Kind regards,

Kevin Rudd
Federal Labor Leader
Member for Griffith

So where to now? I guess we see how the next few budgets treat the ABC. To see the statistics I sent Kevin in my original letter, see here. They're quite enlightening, still, I think.

ABC funding - the scary statistics

ABC funding. Let's take a second to look at what's really going on there.

I wrote to Kevin Rudd about this, and if you want to see his response click here.

Over the last 12 years, things have gone from OK, to bad, to worse for the ABC in terms of funding. For an idea of just how bad it is... let's look at some figures:

[NB: Some of the details of the requirements for the ABC's funding have changed since these facts were compiled for the original letter, but the bulk of the facts remain true and pertinent to the situation at the ABC]

• The Howard government cut 12%, or $55m from the ABC in the 1997 budget, and it has waited until just this last budget for any increase from that level at all.
• "8c per day per person" was the quoted cost of the running the ABC in the reign of David Hill as MD - over 10 years ago. It was quoted in order to prove how little the ABC actually cost to run. Today that figure is below 5.5c per day. Budget cut backs and population growth have reduced this figure significantly - but that's before inflation is taken into account. 5.5c is worth much less now than it was in the 1990's. In fact 5.5c is worth only 3.9c in 1996's currency, and so funding for the ABC has dropped by more than 51% in real terms since then - yes that's right! More than 51%.
• Over the same period through which its real funding has dropped by more than 51% (1996 - 2007) the ABC has been required to maintain it's output for 4 national and 60 regional radio stations and a TV station, and numerous other pursuits in its charter - while also being required to expand it's output for a whole new TV station, it's hugely popular website and more recently its podcasts and its 40 ABC shops.
• The ABC's broadcasts of internally generated new content has fallen from 103 hours to 13 hours annually in just four years.
• Based on 2003-04 figures, the ABC TV's annual budget of $400m is less than a third of the Nine Network's $1.3bn, 40% of Seven's $1bn and 58% of Ten's $686m.
• A recent report was commissioned by the government from KPMG. They were asked to assess whether the ABC was efficiently run and whether or not any more efficiencies could be found. It was quoted as saying "The ABC provides a high volume of outputs and quality relative to the level of funding it receives... the ABC appears to be a broadly efficient organisation." and "even with indexation we do not believe the ABC could sustain its present range, quantity and mix of outputs at its present level of funding". The report suggested that small efficiency gains could be made by reducing staff by 5% in the legal, archiving, library and Human Resources areas. Reviews of the legal department and HR are presently underway. SO - in other words - YES! The ABC is efficient, NO! the ABC cannot find any real efficiency increases in its current state and NO! The ABC cannot continue the way it is currently being funded.
• To take the ABC up to the minimum amount quoted by KPMG as required to maintain current standards (which are already well below historic standards) would mean increasing the ABC's funding by another $37m on top of the recent increase - to a total of approx. $900m. However this still doesn't take into account the recent requirement for the ABC to spend 25% of its total operating budget on New Media and Digital Services - this would require an extra increase of $300m to a total of $1.2bn - just to maintain output [ED - These details have changed since compilation of these facts for the letter to Kevin Rudd, NG]. And FINALLY, if we are to ever get back to the (apparently cheap) days of "8c per day per person" in today's money it would take an increase of the ABC budget to $1.8bn… not too bad when you consider it is running 2 TV stations, 4 national and 60 regional radio stations, an internationally recognised News service, an enormous and popular web site and podcasting service and a chain of retail stores (and also remember that the Nine Network spends $1.3bn on one TV station alone).

Again - see here, for Kevin's response to these statistics.

I love Nelson as a leader... for the Coalition

Actually, I'm starting to suspect Dr Nelson never really changed his politics after all. Maybe he's still actually working for the Labor Party.


The Challenge

I wish to offer you, dear reader, a challenge.

1. Make sure you have nothing around you to entertain distract you
2. Watch the video below. Pay close attention and focus only on the video.
3. Try to make it past the 2:00 mark without feeling the desperate desire to watch something else or turn it off entirely.

Please respond with your own personal reactions below.



What Brendan Nelson has learned

So apparently, Brendan Nelson has discovered that there are people in this country who can only afford $30 a week for petrol, and people who can only put $5 worth of petrol in their car at a time.

Wow. It's obviously been a big week for the man. I wonder if his coalition buddies will believe him.

"No" they will say, "that just can't be! How can people live like that. You must be mistaken. Obviously this is all the fault of the Labor Party and their mismanagement of the economy. This kind of thing never happened under Howard. No one will put up with those kind of living standards for long."

Well I guess if he learns only this one small thing then he has at least listened to someone and learned something.

It's a start, anyway.

But honestly, if that's a revelation to Brendan Nelson - no wonder he doesn't get what 2020 is all about. If he honestly needed to talk first hand to poorer Australians in order to work out they exist - or in order to work out that not everyone can afford to fill their tank with petrol whenever they want to... why should we ever expect him to understand an issue like Global Warming, or the importance of education to social equality.


What Brendan Nelson just doesn't get

And in further news - Brendan Nelson wants us to feel sorry for the banks.

Brendan Nelson: life hard for banks
Nelson wants you to encourage banks to make a profit
Banks are people too: Nelson

Yes that's right. Dr Nelson wants us to realise that "Banks are people too"...

Um... no, actually...

They're not...

They're banks... you know - Companies...

They may be, by strict legal definition, for tax purposes, "entities" much like a person. But the day we start taking our definition of "people" from the tax department, I think we've really lost the battle against pseudoscience in our education system.

But wait, hold on, isn't he saying we should feel sorry for the individuals who have to foreclose on people's mortgages - I hear you say.

Well, in this day an age, I'm sure that an individual employee's experience of foreclosing on customers, compared to times in the past, is about as close as fighting a field battle is to launching an international missile strike. Someone sits in a room somewhere and hits a button that causes the printing of a thousand letters. They get folded and packed by machine and posted to a thousand customers. Some of them contain offers of more credit, new loans and investment opportunities. Some of them contain foreclosure notices.

Along with his lack of understanding about how many Australians live their lives with respect to money, Brendan Nelson also seems to have very little idea about how large offices work in the modern society.

Banks, these days, run by rules and regulations. Certain levels of risk imply certain behavior and certain levels of underpayment require foreclosure. No individual favours or punishments. No human interactions. No guilt. Just transactions, payments and foreclosures. The way it should be.

Dr Nelson said people should stop criticising banks and they should be encouraged to make profits. Isn't he just encouraging us to support banks making a profit?, you respond.

Well, yes he is. And in general, we can all support banks making a profit. It's good for the economy. Any company making a profit, in general, is good for the economy. No argument here.

But to encourage the pursuit of profit, blindly, with no other considerations would lead to many horrible outcomes. Imagine a world in which car manufacturers chased profits with no fear of the repercussions of bad safety standards and no adherence to pollution level guidelines. Imagine if we were encouraged to support housing developers profits in the face of buildings that fell down within a few years of being built.


The Solution?

Maybe the people who can no longer afford to pay their mortgages should never have been loaned money in the first place (they might be better off now if they hadn't). And maybe, just maybe, the banks should have to take some responsibility for the (bad) decision to lend them money when they did. Perhaps we could find a way of minimally fining, or otherwise disadvantaging banks for foreclosing on loans. Maybe then we wouldn't have as many foreclosures as less risky loans were avoided.

Maybe then we wouldn't have so many sad banks to be sympathetic for.

Maybe then less people would only be able to put petrol in their car in $5 increments.

Hey - maybe Brendan Nelson's got a point after all.

Then again... maybe not.

Mandate schmandate - the ultimate hypocrisy

My letter today, to the Australian:

To the Editor of The Australian,

RE: http://www.theaustralian.news.com.au/story/0,,23203982-7583,00.html?from=public_rss

Ms Albrechtsen has spent an entire article arguing against the existence of "Mandate Theory". She makes a very convincing argument. I happen to completely agree with her. In her own words "Mandate theory? Bunkum." I don't support WorkChoices, by the way - but I don't believe the Labor party has the right to roll it back unless it can get its law changes through both houses of parliament in the prescribed manner.

Mandate theory is, indeed, the hypocritical rhetoric of both sides, used, whenever they are in power, to attempt to subvert the checks and balances we have built in to our democracy. Howard was wrong when he claimed the Senate was getting in his way. He was wrong to put forward changes that might have decreased the senate's power to stop laws - and the Labor party is wrong now, to claim they have a mandate over and above the senate's right to stop any law change they wish.

I agree with all of that.

Janet Albrechtsen then commits the ultimate hypocrisy by calling on mandate theory to defend the continuation of IR changes made before 2004. She writes "After all, voters approved those changes at the 1996, 1998, 2001 and 2004 elections. Dare one remind Labor that the Coalition won four mandates for those changes?"

If every government had to maintain the laws of previous governents simply because they were once elected, and enacted them, then the Coalition should have been stopped from ever rolling back laws that Hawke and Keating implemented - after all, presumably they had a mandate to implement them when they were elected. By Albrechtsen's argument, no one should be allowed to change anything that could have ever claimed a "mandate" in the past.

She has gone from "no mandate theory", to the "hyper-mandate theory". Just think of the laws we would never be able to change.

Ms Albrechtsen spends much of her piece gathering evidence of the innate hypocrisy in most arguments that use mandate theory as their basis. Having spent so long making a reasonable argument against mandate theory, to call upon it to argue for anything at all is clearly the greatest hypocrisy of all.

Nicholas Gledhill.

Bring the troops home from the war...

... the lawyers home from the culture wars - that is.

For a history of this log of Labor Party successes see:

Thing that make me happy
The national conversation

Signs of support for the poor and disadvantaged

Once again - here is evidence of the way that modern governments control the news cycle and the way we understand and discuss issues.

The Labor party won slightly more than 2 weeks ago - and have been in power for little more than 1 week - and yet last week they had a "public service reshuffle" and changed the role of the Department of Employment and Workplace Relations.

Apparently they (the Department) have been wasting millions in Legal fees chasing thousands in incorrect payments, under the Howard Government, and penalising the already disadvantaged for being, well, disadvantaged... but can you imagine this being discussed in this way if Labor hadn't won?

SHM Article - Millions lost in legal war on the poor

Let's celebrate the culture of support that this change represents. I realise we've got heaps of money lying around Australia, and sometimes it's hard to know what to do with it all, but using it to chase down people with very little and take even that from them does seems a little bit of a waste to me.

The National Conversation - how political language guides the opinions we admit to in public

When I came back to Australia, somewhere in Howard's first term as Prime Minister, I was immediately struck by how much my country had changed.

Somehow, I realised, the choice of language coming out of Canberra was having an effect on the populous.

People who, in the early nineties, would have been afraid to voice their innate (and often subtle) racism, class-ism and other "ism"s of small-mindedness and prejudice, were suddenly vindicated by some of the arguments being made by the government of the time. Ways of defending and supporting the sexism of misplaced "family values", used by the Howard Government, gave similarly minded people a way of voicing their opinion, and sounding like they had thought about it and were expressing a well considered and carefully framed point.

It makes sense, in fact.

A politician's job is to present their position and sell it to as many people as possible - offending the fewest number possible along the way. And as such, the language of either side will always be in danger of softening and excusing extreme positions with wording designed to make the offensive palatable.

And so I found Howard, having taken the middle ground from Keating in the '96 election, was quickly using his power over the national dialogue to excuse fear of the different, to encourage dismissive arrogance towards the unlucky and socially needy, and to foster love for the culture of the individual.

Obviously, I have to admit, the same thing is done by "the other side", when the chance is given. It happens naturally as a consequence of our modern democracy, the influence of national "sound bite" driven media and the culture of celebrity we live in. But considering I'm a staunch supporter of Political Correctness for the sake of social improvement, I think that the future of our planet's ecology is a moral issue and not just a practical one and I don't believe that an obsessive focus on improving fairness in our society can go too far - when "my side" gets a go at guiding the national dinner party conversation, I don't mind. :-)

The point of all of this?

For many long long years, under a Howard Government, I was often asked, by people who didn't know any better, why I hated him so much.

Besides simply being one of those questions that's hard to answer because it's so bleeding obvious that it's hard to explain... it was also difficult for me to remember all the small ways in which Howard had, over the last week, month, year used his influence in a way that annoyed me.

I would end up quoting things like "50% off higher education", "the Tampa affair", "Children overboard"... did I mention he took 50% off the higher education budget in 1996?

I could never remember it all. The details - the little daily niggling bits. So I prevaricated. I sounded soft and unclear - like someone with an instilled view who didn't know why they believed it.

I wanted to make a list. A list of daily frustrations and reasons why he annoyed me... But I'd missed many years of evidence - some of the best stuff had already gone from my mind, I was sure... besides which - after he was elected the 3rd time in a row, I was too depressed and seriously considering leaving the country in defeat.

So! Fast forward another 6 years and Labor finally managed to put up a reasonable candidate, who could out-Howard Howard - and we won.

As I lift slowly out of the fog of depression I have been living in... as I watch the television, and the language out of Canberra takes an about-face... as I start to realise that this is the same process, in reverse - and how much that excites me... I reaslise that I have a chance to start a new list. The list of great moves made by the new government.

I decided to do this the other day when I was sitting watching the television - the announcement in Bali of Australia's signing of the Kyoto protocol. I do not exagerate when I say, it made me cry. I sat in front of the television as tears came to my eyes.

Yes, of course! it's years too late. I know that. But I was so proud. Proud in that way that a parent is when their wayward child doesn't do the wrong thing again. I wanted to cry, because I was so used to news in that arena upsetting me - it shocked me... like someone kneeling and expecting to be beaten finding the strike never comes.

I still twitch every time they mention the "opposition" and I realise they're talking about the coalition - every time they mention the Prime Minister and I have to remind myself I may not hate what he's about to say.

Enough of my this... here is the beginning of my list - it covers the whole first couple of of weeks of the Labor Party in power, all at once - as it has taken that long for me to realise I could use the words "John" and "Howard" in the same sentence, in the past tense.

Go to the list here:
Things that make me happy

...

Howard's End Director's Cut

It has come to light that, on the night of the election, John Howard's concession speech was, in fact, pre-recorded and broadcast in place of his actual speech.


A certain member of the Liberal party, who thought it important that his final message to the electorate be revealed, recorded this on their mobile phone.


This is what he really said.