Having it both ways

The media are keen on the prospect of a common border between NZ and Australia. The focus is on passenger access and this makes sense if NZ wants to grab a larger share of the tourism dollars expanded by Australians. Enabling them to check-in and clear customs just the once will represent a real benefit and could shift business - particularly from the domestic market where suddenly a trip to Queenstown is both cheaper, quicker and now less fussy than a trip to Perth and Brisvegas.

If, as seems clear, this is the main objective it makes sense but what of the risks?

NZers enjoy a priviledged position in Australia. We've no need to become permanent residents to work and access most benefits. This means it's a pretty simple matter to up-sticks are relocate. As noted in an earlier post, Key has to balance his goals in tourism with the accountabilities he took on pre-election; the promise to reduce the loss of skilled labour trans-Tasman!

When's he going to do that and how?

An ambitious man in Australia

Key's honeymoon continues despite tough times in New Zealand but I wonder what happened to the fire from the election campaign? Remember John wandering around empty stadia lamenting that our biggest export was talent? What about the billboards that promised an end to all those teary farewells? That was all going to change wasn't it? John will claim time's moved on, that the global crisis has shifted the goal posts. But shouldn't that mean people are more, not less likely to return to NZ? Probably you can argue it either way.

The promise to stop Kiwis leaving was ridiculous, the crisis always overstated and the solutions hollow. National's policy, such as it was, focused principally on importing people not on stopping departures. So should Key now be held to account for the continued net flow of Permanent and Longterm Departures to Australia for instance? Yes, but that won't change anything much.

Oddly though, when interviewed this morning on Australia radio (not available online unfortunately), Key made no mention of his concern that New Zealand will soon be denuded of talent. He focused instead on the challenges in the Pacific, on the financial crisis and easing travel between the countries. All valid and reasonable. He, in fact, acquitted himself well, but I wonder what he'll say to the parents who're still taking their kids to the airport? Perhaps he's arranged for them to join him on his Hercules flight home to be literally parachuted into struggling communities en route to Wellington?

The false reality of an election is over. The practical challenge of delivering on the over-blown promise needs attention. What solutions does National have really? When the trans-Tasman super portability kicks in, there may well be some additional movement back to NZ but it won't be great as too many people have lost too much equity and must now rebuild before they can retire.

It's no surprise then that David Farrar has written just the one post about migration since the election (that compares with four in the month or two before it). I can't help but recall Bolger's sage advice against stirring up race-relations during the 1990 election; he's reported to have said "sure it might help us win the election, but what will we do when we show up on Monday to govern?"

It's simple Malcolm, simple

Turnbull's on the backfoot as the media speculate about his leadership. Having been on the wrong side of the stimulus debate, the Liberals have replaced the Shadow Treasurer since the alternative was to replace the Leader. But news reports that Cossie rejected the offer to succeed Bishop have simply revived debate about Cossie's leadership ambitions.

Turnbull's tonight defended Cossie's right to play a bit part but still be the media tart. Did he have an alternative? Not really, but he could have been stronger by saying something like:

Peter Costello has decided to stay on the backbenches despite my offering him the opportunity to help lead the opposition to Rudd's profligate spending. That's his right. As it was his right to rebuff the leadership offered to him by Howard and other senior Ministers after the last election. I respect Peter. I also respect his judgment that the renewal of the Liberal requires new and not retreaded leadership.

The Liberals probably felt they had little room to move on the stimulus package and some of their concerns might prove to be true if, in the long term, deficits become entrenched. But by the time their position is finally proven right or wrong, Turnbull's fate will have been long since determined.

Postscript 1: Tony Jones quizes Christopher Pyne on Lateline and compares the current leadership tensions with those that existed between Howard and Hewson. Ouch! Pyne sticks to the line that Costello can join the front bench whenever he wants but this simply invites Jones to ask if it's Hockey or Turnbull who's the seat-warmer? So long as Cossie remains in the caucus, the media will speculate about his ambitions.

Preface: Larvatus Prodeo also (earlier) noted Costello's frequent media appearances.

Postscript 2: GST's worst advocate and former Liberal leader Dr John Hewson leads the charge against Cossie declaring him a lazy eunuch.

I shouldn't but I do...

Peter Costello's a bit of a guilty pleasure. His politics aren't mine, his earnest Christianity bugs me and he was a senior Minister in what I consider an amoral government and yet, I thoroughly enjoy him. Last night's inteview on ABC's Nightline perfectly encapsulates the man. Preening, posturing, glib and smarmy and yet, undeniably good politics. He excoriated Rudd, he wedged Gillard, he smote Turnbull (well, not really but I wish he had) and ignored Howard. Tony Jones seemed even to enjoy the occasionally patronising remark. He's apparently unelectable as PM - so Liberal and Labor pollsters will tell you - but were I Turnbull, I'd be nervous as hell.

Again, though I don't agree with Costello on many issues, I can't not appreciate this:

You know, actually, we ought to be much more assertive here. We're Australian. I think the Australian model is what can be held up around the world. So why doesn't Kevin Rudd want to say that? Because there's a certain ideological fervour to him. He can't say the Australian model's the answer because he wasn't part of putting it in place. That would be to give too much credit to the Coalition Government. Now, I think at a time like this, he ought to drop his pride; he ought to say as Julia Gillard - in all fairness, Julia Gillard had the honesty to say, "Yes, the Australian model was the best." And he shouldn't be ashamed of actually giving credit to the Liberal Party, rather than writing these appalling essays for The Independent Monthly.

GetUp against stupid, populist censorship for the sake of pandering to the ill-informed and/or paranoid

Luhrmann gets political

Baz Luhrmann, director of Moulin Rouge and Romeo and Juliet, has used the promotion platform of his latest movie, Australia, to comment on Australian race relations, or at least the history of race relations.

Luhrmann noted that had Barack Obama been born in Australia, he'd not likely have achieved anything like he has in the US.

To give context, the President-elect of the United States is 47. If he Was living in Australia, it is absolutely credible that the government, because he had one white parent and one black parent, could have taken him forcibly from his family.

They would have put him in an institution, probably lied to him that his parents were dead, changed his name and reprogrammed him to be European, so he could have some sort of function doing something of service in white society. That would possibly have been Obama's journey.

Sound far fetched, it's not. Note the following from the wikipedia entry on the stolen generation:

In the 1930s, the Northern Territory Protector of Natives, Dr. Cecil Cook, perceived the continuing rise in numbers of "half-caste" children as a problem. His proposed solution was:

Generally by the fifth and invariably by the sixth generation, all native characteristics of the Australian Aborigine are eradicated. The problem of our half-castes will quickly be eliminated by the complete disappearance of the black race, and the swift submergence of their progeny in the white.

Or more recently, from the 1997 Australian national review, Bring them Home (chapter two history of the practice of forced separation):

Dr Max Kamien surveyed 320 adults in Bourke NSW in the 1970s. One in every three reported having been separated from their families in childhood for five or more years.

Luhrmann's comments are no revealation, however, his movie is a partnership with Tourism Australia and intended to boost tourist numbers. I wonder how his government partners feel about his forthright comments?

I'd not really intended to see the movie, though I am a fan of Luhrmann's work, it didn't particularly appeal. Perhaps I now will.

David Hicks finally free

When David Hicks pled guilty to terrorism charges in a US military court, he knew that he'd be released to Australia. This was probably the only thing about which he could have been certain. Though freed from inhumane treatment at Guantanamo, he nevertheless had to serve out his sentence. Immediately on arrival in South Australia, he was placed in solitary detention in a maximum security prison. Later, he was released from prison though subject to a control order. In Hicks case, the control order limited where he lived, who he associated with, the phone he used and the hours he was allowed out - restraints that surely represented significantly more freedom than his last six/seven years but which nevertheless still offended some jurists.

Yesterday, Hicks appeared to the public for the first time. He thanked members of GetUp for their support. Though not yet ready to say more about his experience, he asked them to continue supporting him including by opposing any extention of his control order. Whether this, or just the political need to move on, was the cause Hicks got his wish. As of 21 December 2008, the control order expires and will not be renewed.

It's not clear what, if any, restrictions will be placed on Hicks in addition to those that would apply to anyone convicted of a serious offence. His situation is unique. Whether he should ever have been tried will be the subject of debate for many years. I'm inclined to think he shouldn't have been for many of the reasons noted here and here. As I've said previously, Hicks was clearly a foolish and dangerous man. A man who was certain to find himself at war, in prison or dead had he not been detained. However, what Hicks might have done, how he might have breached then non-existent laws, how he might have taken up arms against his own citizens - these unrealised offences don't come near to justifying his treatment.

Lots of people and organisations can be proud of their efforts and support for Hicks. It mightn't have been popular, easy or clear-cut, but for all of Hicks' failings, the defence of him was a defence of us all. Perhaps David Hicks' military lawyer, Major Michael Mori, said it best in his interview with Andrew Denton:

With David Hicks, no-one is saying David actually did anything wrong or hurt anybody, just he was on the wrong side. When you say he's accused of being on the other side, so because he was on the other side we can go ahead and take away those fundamental rights and protections that we give to our murderers and our child molesters and our rapists, and to our corrupt politicians. They get it. Why doesn't David Hicks rate the basic fundamental human values that we give everyone? If he's violated the law and you try him in a fair system, fine. They don't want to give him that fair shake, unfortunately because I think his case has become political and the politics of it don't want to - the first Military ommissions can't be acquittals. They couldn't afford that.

More taxes than wombats

... so says Ken Henry, federal Treasury Secretary.

In today Australian Financial Review, offline, Henry notes that there's 125 different taxes, more than the paltry number of protected northern hairy-nosed wombats, 115.

Too often NZ commentators elide over the complexities of federalism in preference for trite statements claiming Australian's have higher wages (true at least at the upper-end, but probably not in the middle) and lower taxes (next to impossible to know).

Typically, these commentaries focus only on direct income taxes to make out the advantages of working in Australia compared with New Zealand. This obscures, however, the myriad of taxes that occur outside of your pay-packet (as well as some, such as compulsory superannuation and the income-contingent health levy, that are additional to Pay As You Go). For instance, stamp duties and land taxes are major contributors to states' revenue and a significant impost on individuals in addition to income tax.

Henry observes:

An excessive level of complexity wastes resources. It diverts resources from
more valuable uses; many high-achieving tax agents could be school teachers.

The fact is that the Australian tax system is incomparably more complex than New Zealand's. Consider for instance that most salary and wage earners in New Zealand need not even file a tax return, no such exemption exists in Australia (most people have tax agents to do the work for them). Add to this the inummerable GST exemptions and it's impossible to know just how much tax any one individual pays. Makes you wonder about the $6.2 billion bailout to the car industry.

Future fund loses $780M

Cossie's Future Fund has not faired well of late. Hardly surprising given the environment. The return for 07/08 is a modest 1.5 per cent. That's 3 per cent less that CPI and hugely down on the almost 7.4 per cent in the previous year. This is hard on people who're expecting to retire soon - I wonder what reforecasting is being done to assess the numbers of people who'll defer their retirements?

It's worth remembering that in 2006/7, Costello made one-off changes to the tax system to enable additional contributions of up to $1 million. Here's what he said at the time:

For people who were planning a large payment into superannuation under the current rules and would have become subject to the contribution limits, we are announcing that subject to any applicable work test, they will be able to put $1 million of post-tax contributions into superannuation before the 30th of June 2007.

Costello couldn't have foreseen the global financial meltdown so he can't be held responsible for the fact that these additional contributions may have reduced the net benefits for some (he does tend to have a bob-each-way however as he's also said that he'd told Greenspan that he foresaw problems...). Still his various disingenuous declamations possibly won't help his credibility.

Also note that compared with John Key's plan to have 40 per cent of the NZ fund invested domestically, the Australia Future Fund invests only 9 per cent with close to 20 in global equities. The majority, 35 billion or approximately 60 million is in cash. Note that these figures exclude Telstra holdings which are in escrow. Finally, check out the principles guiding the Board's investment strategy (page 17) which include this statement:

that a higher expected return per unit risk (investment efficiency) can be obtained from a broadly diversified allocation across asset classes.

Given that John's so keen on Australian aspirations, why's he so ignorant of their strategies? Costello's miscalculation disproves his legendary soothsaying abilities, why would you believe Key's are better?

Australian Liberal Leader's a Twitter

Malcolm Turnbull proves he's hip-with-the-kids.

NSW by-elections

Four Labor-held State seats are up for by-election tomorrow. The retirements of the Premier, Deputy Premier, Treasurer and Minister for Health will all test electorate reaction to the new Labor-leadership. Rather than offer my opinion - I can't even vote - I'll offer ABC polling expert, Anthony Green's.

Defence matters

Many years ago, as an aspiring student politician, I know that, at some point or other, I said that defence funding should be scrapped to fully fund university education. I hadn't thought it through particularly.

I no longer think that NZ could do without defence funding. We need forces capable of protecting our economic zone and particularly our fisheries, we have regional responsibilities and broader responsibilities to our allies. I do not think however, that our responsibilities to our allies includes having an airforce strike wing and have argued this with David Farrar here.

NZ's military commitments are significant and valued but they are limited. NZ should not attempt to fund the kind of military assets needed to act unilaterally, it should continue to develop a military designed to collaborate in the kinds of UN-sanctioned actions in Afghanistan, East Timor, the Solomans, Bosnia etc.

Incidentally, I recently caught up with an acquaintance who's just returned from Iraq. We discussed Australia's engagement in Iraq compared with Afghanistan and also the difference between NZ and Australia's position. He was clear that there was little support within the troops for the Iraqi mission and that as much as possible, Australian forces avoided hot regions and unreasonable risks - this was a sanctioned strategy, not an ad hoc one. He had been to Afghanistan, and many other places besides, and was frustrated that the current political situation meant Australia's small commitment would not be reviewed until after the election...

Howard has nowhere to hide...

I love parliament. For the most part, it isn't all that important however there are events and issues that can only be adequately addressed in parliament. It is a unique forum; the rules and privileges are unparalleled. Unfortunately, so few make responsible use of it.

Lange was the greatest parliamentarian I ever saw first hand. Keating was probably his equal although I never saw him.

This clip, from around 1995 (I think), shows Keating at his best - Howard has nothing. Sadly, there's no one in federal Labor today that could come close to Keating's intensity or intelligence.



hat tip: browncardigan

Immigration Minister wrong

Surprise, surprise, surprise. Andrew's cancellation of Haneef's visa quashed by High Court. Expect an appeal.

Strippers Rattle Rudd

Kev's in trouble. How much is hard to tell but news that he visited a New York strip club will surprise many. Kev's a good Christian bloke, so much so that for a time some of his colleagues thought him too much of a prude to lead Labor. Now he's revealed as a bit of bloke who necks a few too many and then ogles the local ladies - well once anyway.

I suspect the fact that he visited a strip bar won't hurt him much, but that he was on official taxpayer business at the time might - Cossie's already making jibes that he'd be far to busy to take such indulgences... plus there's a hint that Kev got a bit too close to some of the dancers...

Gazump

Sydney is obsessed with the property market which makes it all the more strange that it is so incredibly poorly served by real estate agents. Real estate agents are heterogeneous group; many are lazy, unenthusiastic fools whose continued employment is a function of the low entry standards while others make a matzah through diligence and professionalism. My latest experience is unfortunately with the first, and sadly largest, group.

A place, seen only ten days ago, appealed greatly and we clearly indicated our interest by notifying the agent we'd likely bid, obtaining the contract and asking all sorts of questions. We also specifically requested that the agent keep us informed in the event that the vendor received an offer. A week passed during which we made some plans to have building inspections done and talked with our lawyer - we were all ready to make an offer after seeing the place again when we realised it was no longer being advertised. A quick call to the lazy-ass agent confirmed that the place was under offer. Annoyed with his failure to advise us as agreed, but somewhat resigned to missing out, we sent a carefully worded but clearly shitty email to him advising him that he'd both failed in his commitments to us and probably cost his vendor by not seeking our bid.

Jolted out of his stupor, the agent called later in the day to clarify that the deal wasn't closed and that he'd present our offer to the vendor. Gazump? We offered about one percent more but held little hope - in fact I wondered if the agent wasn't simply covering his arse having been caught napping - sure enough, 24 hours later, the vendor accepted the original offer and we missed out. No gazump.

Moral of the story. You can't trust real estate agents - there's a few who're smart business people but the majority are lazy, unethical and interested only in their immediate commission check. That this group remains in business astounds me but is probably a reflection of the generally low professional standards and the dynamism of the Sydney property market. At the risk of sounding like a regulator, I'd significantly increase the barriers to entry and encourage the professional association to develop training and credentials that led to some market differentiation.

Or what about a variation on ratemyteacher? ratemyagent?

How long's a piece of string...

The Australian Chamber of Commerce and Industry have published some economic modeling as part of their scaremongering against Labor. They had to do it really, the Lib's credibility is shot to pieces by continual rate rises giving the lie to their promise to keep interest rates at "record lows". But it's value is very limited - it'll get plenty of media attention and allows them to erect banners around the country claiming that 316,000 jobs are at risk but it's frankly ridiculous.

The study, conducted by Econtech, is premised on comparing a continuation of the Coalition's IR laws with a complete roll-back of all industry reform since 1993 - including the Keating-led Labor government's Industrial Relations Reform Act - this is a false premise and it totally undermines the value of the report. No party, certainly not Labor, propose a restoration of the archaic and inflexibility of the '80s so what is the point of this exercise?

Professional economists clearly do not have sufficiently high professional standards. If they did, they'd attempt a more meaningful exercise and examine the anticipated economic effects of Labor's proposed IR reforms compared with the Coalition's.

I'm not a professional economist, but have worked with them including on a project that estimated the economic value added by TAFE NSW, and I am fully aware of the way in which deprival econometric modeling is done - but I also know that the limit to this approach is the validity of the underlying assumptions. In this instance, the assumptions bare no relation to reality.

Stationery porn

That's an "e" not an "a" BTW.

Commonwealth/State politics involves a fair bit of set-piece drama. The Commonwealth's principal tactic is straight out brinkmanship whereas the States employ a little more tactical variation (though nevertheless still trot out "states rights" which is a polite way of saying "see you in court"). It'll be interesting to see how the current standoff over control of the Murray-Darling basin resolves itself.

Coming from Aotearoa, a unicameral and unitary state, I'm ambivalent about federal systems. One the one hand, they provide for, potentially, more direct and responsive government - particularly if you live in Perth or Darwin. On the other hand, there's duplication, inefficiency and inevitable conflict.

Some work I'm doing falls neatly into the "new federalism" debate - the catch-all phrase to describe the current jostle between the federal Liberal/National Coalition and the Labor-States - and means regular appearances at national sub-sub-Committees of the Council of Australian Governments.

Two things strike me about these committees. First, the level of professionalism is particularly high despite the rancor and tension of Australian politics generally and election time specifically. Secondly, the no-expenses spared cornucopia of stationery. My carefully and lovingly developed folder was stationery nirvana - imagine Bill Gates kids' allowance for their school's stationery day - I had three different colours of paper, two different types of divider and three different types of little sticky labels - plastic not paper - each of which had had printed on them the title of the paper to which they referred. It was a thing of beauty that took two people two days to compile for each of the half dozen officials attending the meeting.

Kerry O'Brien 3, Cossie 1

Good interviewers are a rare breed. Too many wilt under serious pressure, particularly from politicians, or become shrill and repetitive. O'Brien however is supremely confident and calm. His interview with Costello last night could easily have degenerated - he point blank asked Costello how the electorate could be expected to distinguish truth from lies in Liberal party advertising - but for O'Brien's experience.

If you were scoring the interview, the opening gave you an indication of events to come:

O'BRIEN, Peter Costello, nine straight interest rate increases in the last six years. Five rate increases since the last election. I thought we were supposed to trust you to keep interest rates at a record low?

PETER COSTELLO, TREASURER: Well, let's put it in context. 19 interest rate cuts and 15 interest rate rises, so the fact of the matter is that interest rates are lower today than when the Government was elected, and in those 11 years, not only have interest rates come down, but we've had 11 years of continuous growth and 2.1 million more jobs added. So, the fact that you could actually have interest rates lower today than they were before this period of expansion commenced, and before 2.1 million jobs have added, shows you how far the economy has come.

Well matched, one all I'd say, however O'Brien's questioning wasn't about whether or not Cossie and co. were good economic managers, it was whether or not they were honest - honest about both the faults of Labor and their own abilities. Remember last election's scaremongering about Labor's ability to keep rates down?

I relieved by this questioning, relieved that the government are being held to account for their ridiculous claims. I'll concede they're managing the economy well enough, but spare us all the omnipotent crap. Which is why I particularly enjoyed this exchange from later in the interview:

KERRY O'BRIEN: As it's risen nine times in six years, the Prime Minister today distanced himself from the Liberal Party promise at the last election to keep interest rates at "record lows". Do you also disassociate yourself from that Liberal Party promise at the last election to keep interest rates at record lows?

PETER COSTELLO: Well Kerry, I have no doubt that a vote for the Coalition at the last election was a vote for lower interest rates and a vote for Labor and Latham.

KERRY O'BRIEN: Mr Costello, Mr Costello this is a very simple proposition I'm putting to you, a very simple proposition. Can we trust your promises or not?

PETER COSTELLO: Of course you can because Kerry...

KERRY O'BRIEN: The promise was record low interest rates.

PETER COSTELLO: Ok, you've asked your question, now let me give you the answer. The last election you could have voted for Labor led by Mark Latham or the Coalition led by John Howard and Peter Costello. The fact is if you wanted to vote for lower interest rates, you voted for the Coalition, Costello and Howard. I don't think even Kevin Rudd in his wildest imagination would have said that a vote for the Labor Party and Mark Latham would have had us in the situation we're in now. That's what they we're saying. Mark Latham for Prime Minister and the Labor Party. The vote for the Coalition was the vote for low interest rates, it's proven by comparing the historical record, and it's proven by comparing Australia's position in relation to growth in other countries.

KERRY O'BRIEN: But you've left out the word "record low interest rates" Mr Costello, which was what was promised at the last election. So when we see Liberal Party ads making all sorts of claims during this next election campaign, how do we know which ones to believe and which ones not to believe?

Well said that man! Two - one O'Brien.

And finally, O'Brien challenges Cossie to explain the benefit of tax cuts - five in five successive budgets - which merely offset the rising cost of debt? Five tax cuts, but seven rate rises? Cossie's answer is very poor - the tax cuts have not put the government into debt. But Cossie, that's not the point, your books might balance, but do those of the working families on whose good favour you rely for re-election? Three - one O'Brien by my count.

Full transcript and video here.

Chronicle of a death foretold

The demise of Howard has been predicted more times than rain on the West Coast. Still, he hangs in there as desperately as does George Gregan. But this must surely be his end? Poll after poll show the Liberal's losing ground despite all manner of dodgy politics including the entirely predictable union smears. Now facing renewed leadership tensions triggered by the release of a new biography, Howard's days are numbered with some even suggesting he might not be leader at the election.

Australian politics is a mess. The detention of Mohamed Haneef appears a gross breach of basic human rights and each day's news reveals deeper and deeper flaws in the case against him - the latest that his diary was tampered with by the Police. And on the eve of APEC, Sydneysiders are being urged to pack up essentials into a "go-bag" in the case of an emergency - this isn't stupid, but the timing suggests a degree of hysteria. Interestingly, BBC World service interviewed random Sydneysiders in a local shopping mall, asking them what they'd pack? Not surprisingly a number suggested beer. Aren't the colonials cute?

And now today's news that NSW Police Commissioner, Ken Moroney, wants the power to take DNA samples from anyone arrested, regardless of their offence, for storage in a DNA database. This is, of course, obscene. The presumption of innocence cannot be said to be meaningful if, on being arrested and regardless of whether you are tried or convicted of a crime, your DNA is stored for cross referencing against future crimes. Moroney appears to be putting his hand up for even earlier retirement.

Thankfully sanity prevailed on the weekend with both the All Blacks and Silver Ferns beating their trans-Tasman rivals. Sadly, even if you have pay-TV, you won't see the final game in the Netball series as, yet again, ABC have decided against showing the decider live...