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Category: Privatisation

29/09/2023

An Apolitical Public Service?

One of the ideas that was fashionable in my youth was that the public service was to be apolitical and give unbiased advice to Ministers, who would then presumably implement it.

This principle seems most challenged in the 1980s when ‘Harvard Management’ was the watchword. The facts about what was needed were presumed to be clear to the manager and his (or rarely her) job was to implement this against the inertia and ignorance of the rest of the organisation. There were workshops on ‘how to break down the culture of an organisation.’ There were articles at the time about how superior the US political system was in that the heads and significant senior level of the public service were all replaced after each electi0on so that their departmental programs followed what their new political masters wanted.

I saw at first hand at Sydney Water the progressive replacement of managers who had risen up through the ranks and knew what they were doing by people who played office politics or were politically favoured and did not even know what they did not know. The Liberal management imperative at the time was to slim down the organisation, and since it was a ‘government owned enterprise’ realise the profits of its activities. In short, to sack staff from 17,000 to 2,000, and take what was formerly paid in wages as dividend. So these wages actually became taxes because the water rates did not fall. Stormwater pipe replacement programs were halted, the apprentice training school was closed, the employment schemes for people with disabilities, long term unemployed, and for those recently out of prison were all ceased and repairs were only done ‘when needed.’ So the relationship between the Public Service doing its job in a traditional way, and the political imperatives driven by the dogmas of the day were clearly illustrated.

At a more entertaining level, the ’Yes Minister’ series from the BBC showed the politicians being led by the nose by immutable public servants, while the more recent local ABC show ‘Utopia’ had a sensible public service being mucked around by foolish politicians.

At the Federal Australian level, one might recall the trouble that Andrew Wilkie got into when working for the Office of National Assessment (ONA), when he alleged that the ONA was being told to find evidence that justified the war in Iraq, rather than being asked to evaluate whether such evidence was persuasive. The Robodebt saga had public servants who seem to have been justified in their belief that if they did not implement the scheme that may well have been illegal their careers would suffer. That did not stop them wearing the flak later.

The dogma that the private sector knows best is only true if the Public Service has all the people with specialist knowledge given redundancy, as was the case in Sydney Water. The rise of PwC and the inability to supervise them comes from the weakening of the knowledge base of the public sector, driven by the current imperative to keep the government sector as small as possible, not that using consultants over career public servants with specific expertise actually saves any money in the medium term.

But there is politics in every organisation, from the local tennis club to the public service to international politics. (My only advice is that since all campaigns take much the same amount of energy do not waste time on small issues). It is naive to expect people not to play politics; it is necessary for a career. The critical thing that needs to be ensured is that the competition is fair and transparent and that the right things are rewarded.

The top echelons of the public service still have power as was demonstrated by the saga of Michael Pezzullo. He lobbied to increase the power of Home Affairs, which was of course helped by the demonisation of boat people that had done so well for the conservative side of politics. He then interfered in who was in Cabinet, favoured Big Tobacco, favoured recognising Jerusalem as Israel’s capital, supported a firm that was going to process visas when this was privatised, and PwC when the COVID quarantine system was to be privatised. (It might be noted that today’s SMH which details a lot of this has frequent disclaimers, presumably to evade Australia’s rigid defamation laws).

It is ironic that the Public Service Act was revised by the Howard government in 1999 as they presided over the rise of consultants and the politicisation of the shrinking public service.

The difficulty of rebuilding the public service is huge. If people have expertise that they can profit from they will be reluctant to return to the public service on a lower salary, particularly as no one will any longer be sure of security of tenure. One of the advantages of the old public service was that if your career went into an area of specialised knowledge you were not very employable in the open market but you had a job until retirement and your knowledge was respected and used in your field. This situation will be difficult to re-create.

The harms done by the dogmas of small government and neoliberalism will take a long time and a lot of thought to undo.

Amidst the shattered remnants of an impartial public service

03/09/2023

Qantas- What a Tale!

3 September 2023

I used to fly Qantas. I used to go on holidays to Europe in winter, having saved my pennies from my casual student job. I went in winter because it was Uni holidays. (They were the days when students could actually save while at uni, if they were super frugal, worked enough hours and did not care if they did not get credits).

When the Aussie-accent welcome was spoken on Qantas, it felt like home. But Qantas became ever more expensive, and now is often double the budget carriers. I have remained frugal on air fares, as you can stay a week longer overseas on the difference. If you are on the same plane with the same departure and arrival times, why pay a thousand dollars for slightly more legroom, slightly more attention and a slightly better meal? And if it is a cheaper plane that does not crash, the flying times are also much the same.

I flew on Ryan Air around Europe when Alan Joyce was in charge. The tickets were cheap, but you paid to choose your seat, were encouraged to pay to go to the head of the queue, were hassled to buy lunch, duty-free and lottery tickets even when you got on board. There was talk of having to pay to go to the on board dunny; I don’t know if it ever happened. I was therefore worried when Joyce got control of Qantas. The Qantas’ safety record was based on maintenance well done in Australia. That was outsourced. The prices still rose, blamed on fuel prices of course. The staff were largely retrenched with COVID, but Qantas got a lot of jobseeker money that was not repaid. After COVID, many middle class folks have wanted to have overseas trips or see relatives (including me) and have paid top dollar for tickets. There is a shortage of flights, presumably due to a lack of staff returning to the industry, but record profits. Luckily I have never thought much of flight credits or bought tickets for non-existent flights; this last must be more luck than management.

Qatar did not get landing rights, almost certainly to protect Qantas profits, even though Qantas is no longer an Australian government airline and after various privatisations Australians own only 51% of it. But we will all be paying more for this denial of competition .

I was also interested to read Joyce’s background. He was a mathematician who is very good at maximising the profit from various aviation-related sales. I guess this explains the optional extras on RyanAir and the crazy price gyrations even while you are logged on trying to buy a ticket.

Australia is something of a haven for powerful industries seeking monopolies or oligopoly powers. Sydney Airport was privatised by John Howard and his chief of staff, Max (the Axe) Moore –Wilton left to manage the buying organisation, Macquarie Airport Corporation. Airport charges rose massively. Some airlines could not afford this and stopped flying their routes. At the time I was living in Dunedin and Sydney-Dunedin was one of the routes discontinued, so instead of a 3 hour flight from $200, I had to fly via either Christchurch or Brisbane at more than twice the cost with stopovers as long as 13 hrs. A huge benefit to an Aussie corporation at huge cost to the flying public, and this is totally ongoing. Airports should be a service run on a cost-recovery basis.

It is time Australia got a competition policy that stopped the supernormal profits of oligopolies, which has made Australian companies so profitable compared to overseas companies doing similar jobs, which is leading to huge number of takeovers by foreign companies and Australians further losing ownership and control of our national assets. This Qantas nonsense has to stop.

03/06/2023

Private Schools- part of entrenching inequality

31 May 2023

In the 1960s State Aid for Church schools was initiated in NSW. Then there became an emphasis on ‘choice’ of school and subsidies for children to catch a bus away from where the child lived to the school that they wanted to go to.

Governments, particularly conservative ones want more children in private schools as this lessens total government expenditure, though private schools have successfully demanded closer to the amount of money per student that the public schools get. The subsidies also favour their conservative voters.

Private school parents, seeking advantage for their students pay high fees so the government funding seems to be spent along with the other money on swimming pools and ‘luxury items’.

Meanwhile Australia is slipping down the world education ratings, because public schools are neglected. The sociology also needs to be considered. The ‘choice’ is only for some. The parents who do not have the financial means for a private school, nor the grades to get into a selective school have to take what they can get. I visited a school in a disadvantaged area in Sydney, and looked at the school photos in the foyer. There was not a white face in the last 15 years- all the students were either of Pacific Islander or Middle Eastern origin. The Principal said to me that she just wished she had a few Anglo students to model what the majority of Australians do. There had been a stabbing in the playground about 30 years ago, and this had led to ‘white flight’. There were also a considerable number of children with disabilities, which may be related to marriages within ethnic family or religious groups. With poorer facilities, disadvantaged students a lack of role models and teachers with lower pay, the Principal said it was very difficult to get her graduates good results and able to compete for jobs.

I live in a relatively good suburb near a place where buses can turn around. Each day 8 busses leave from close to me to go to 8 different private schools, 4 single sex male, and 4 single sex female. I think of them as Apartheid busses. The buses are all branded and new. The students getting on board can go in relative luxury from the civilised suburb to the well-endowed schools. They need have no contact with poorer folk, even on public transport. These advantaged students will go to universities, into top jobs and make decisions for us all.

I am reminded that in the US in the Johnson era there was ‘bussing’ which took more wealthy students to schools in poorer areas to make richer students aware of how the poorer student lived and to increase equality of opportunity. Australia, supposedly the land of the ‘fair go’, is now quite the opposite, subsidising inequality as we become the country with the most privatised (and unequal) education systems in the world. Now, just to emphasis the point, ‘for profit’ schools are coming in. ‘Hey, what is wrong with making a profit?’ we hear them cry.

When I went to school in Port Kembla, half the school were children of post-WW2 migrants from Europe, ‘displaced persons’, or what we would now call refugees. Half the children arrived at kindergarten unable to speak a word of English. There were 46 in my class. All this was ‘normal’. There was no anti-discrimination legislation. But the over-riding unifying factors were that all the kids in the school had the same experience, all the parents had jobs and the Housing Commission was building whole suburbs of houses as fast as they could to settle the new migrants. By the end of 3^rd class there was really no difference between migrants and Anglo-born. It was equality of opportunity, a ‘fair go’. This is what is being lost. We see the example of the US where the gap between rich and poor keeps growing and we are subsidising the same process!

We forgot about the first Gonski report on educational inequality as the politicans did not want to offend the middle class by lessening their education subsidies. Gonski was pressured to do a weaker second report and inequality of opportunity keeps growing.

The politicians tell us that their education funding has never been higher. Perhaps this is so, but while the money is spent on luxuries for some and there is not enough financially or sociologically to help disadvantaged areas, Australia will continue to slide down the international education rankings and the entrenched disadvantage that continues from generation to generation will continue.

Selling out our school system to profit multinationals

17/05/2023

Our government is being privatised by stealth.

SMH 17 May 2023

Geoffrey Watson

The PwC scandal is serious, but it seems to have been lost in the background noise of a coronation and a federal budget. Yet the scandal raises some very big questions about how we are being governed.

The facts are simple enough: in 2013, Australia was engaged in an international effort to crack down on multinationals avoiding corporate tax through cross-border income and asset transfers. Specialists from PwC were brought in as consultants and given access to highly secret materials, subject to confidentiality agreements.

PwC’s top international tax partner, Peter Collins, took the information and shared it widely inside the firm. It was then sold to the targets of the crackdown, teaching them how to sidestep the same anti-avoidance measures PwC was helping to draft. The misuse of the highly confidential material was given a name reflecting the targeted market – ‘‘Project North America’’. PwC probably made many millions of dollars.

Disgraceful conduct, but highly lucrative for the partners at PwC.

So how do we know about this? Well, we did not hear it from PwC. In fact, PwC was obstructive: when the Australian Taxation Office sought information, PwC declined to cooperate, claiming legal professional privilege – a tactic commonly deployed by those clients of PwC. Instead, we only know about this from the outstanding work of two journalists at the Australian Financial Review digging into the reasons why the Tax Practitioners Board was resisting the reregistration of Peter Collins as a tax agent. If not for them, this sorry tale would not have come to light.

As usual, there seem to have been few adverse consequences for those involved. Collins and the chief executive of PwC, Tom Seymour, have left PwC, but we don’t know upon what terms – they may have received handsome payouts. We don’t know how much money PwC made from its Project North America because the partners won’t say – and they have not made an offer to disgorge their wrongful profits. PwC has not told us to whom they sold the information, so we have no idea how much tax has been avoided. PwC has announced it will commission an internal inquiry, but that is obviously insufficient.

But this is much more than a story about misconduct by a Commonwealth contractor; it is far darker than just that. There are many questions, all unanswered.

The first question: Why on earth was PwC – a substantial contributor to the global problem of crossborder tax minimisation – involved in designing Australia’s response to that very problem? Anyone could see this was going to be a problem.

That raises the second and even larger question: Why is Australia outsourcing so much of its governing to private enterprise? Policy development and implementation are now routinely taken from the public service and turned over to private ‘‘consultants’’. Some will say this is because the most highly skilled and experienced people are in the private sector and, you know, this is probably true – but it is only true because the private firms have poached the most skilled and experienced public servants from the public service. This makes good economic sense for the big firms who can charge those services back to the Commonwealth at high rates.

I am not exaggerating. Look at the audit results published by the APS for 2021-22. The Commonwealth paid $21 billion for external labour – i.e. consultants, contractors and labour-hire contracts – in a single year. To give some perspective, that is roughly the same as the federal government spent on secondary education that year. This spending was not made public. The Coalition had boasted of massive costs savings through cuts and caps on public service employment without telling us the holes were filled by payments to private enterprise. Our government was being privatised by stealth.

It may be a coincidence but, over the last decade, the major beneficiaries of mass privatisation were donating heavily to both sides of political power – Labor and the Coalition. PwC was one of the largest donors. It is another sad story of inadequate federal election funding laws and the pernicious role of big money in our election cycle.

Will Labor be better? So far, the new government’s response to this debacle has been strangely muted. Existing contracts with PwC must be investigated. Negotiations with PwC for further contracts must be frozen. Heads must roll. We need an inquiry – surely we should not be outsourcing that to PwC.

We need to take a deeper look at the way in which we have been outsourcing government. It seems we have been going down the wrong path. It is time for change.

Geoffrey Watson SC is a director at the Centre for Public Integrity.

17/02/2023

The Triple Lunacy of Westconnex

17 February 2023

Westconnex, the underground freeway network will open later this year. Few realised the extent of it and for a period, trafffic will flow more smoothly.

But it was, is and will be a triple lunacy.

Nowhere else in the world are governments building freeway networks, let alone tunnelling them undergroup at vast cost. Cities like London have congestion taxes, some European cities are even closing their major roads, and it a subject of significant discussion (ww:://h2020-flow.eu/news/news-detail/when-roads-are-closed-where-does-the-traffic-go-it-evaporates-say-studies/). The world is trying to have more public transport to lessen the need for private cars, their cost, their parking and their greenhouse gases- except NSW!
The underground freeways will be privatised, so represent a huge subsidy from the taxpayer, as the private monopolies have a track record of huge tolls and guaranteed revenue. The tolls are already subsidised to lessen commuter pain, which amounts to continuing payments to the toll operators. Chris Minns’ Labor election platform is to subsidise motorists who spend more than $60 a week on tolls. Who are these and how many of them are there? Logistics companies? Couriers? Or tens of thousands of commuters? Naturally there will only be a few toll operators.
The money spent on road tunnels was not spent on a decent Metro system, that would have made most trips unnecessary and taken the cars off the roads. Of course a train tunnel is smaller than a road tunnel, much cheaper to build per Km, carries far more people and does not require ventilation (or very little).

One might ask why all this happened. My theory is that the RTA engineers were far more politically savvy than the State Rail Authority. The RTA were dealing with politicians and building motorways all over the state, wherever they could get the government to pay for them. The SRA confined its thinking to the existing rail network, and thought in terms of better train technology and industrial relations problems, rather than building their network and having a big part in urban planning. And of course the lobbying was probably helped by big bankers and big construction companies and by ex-politicans at Infrastructure NSW, which was set up in 2011 by Barry O’Farrell with ex-Premier and ex British-American tobacco executive, Nick Greiner in charge- a great privatiser.

WestConnex has beavered away at vast but unperceived cost and only attracted attention for its ventilation shafts in suburbia, or the chaos on existing roads as its portals were constructed. Now, for the next few years the affluent and the through traffic will have an easier time of it, and we can continue to lobby for the Metro system.

Web of steel, concrete and cable takes shape below

WestConnex is on track to open late this year, writes Matt O’Sullivan. (SMH 17 February 2023)

The scale and complexity of the final stage of the $17 billion WestConnex motorway project, buried up to 60 metres beneath inner Sydney, becomes clear the deeper workers venture into a twisting maze of road tunnels, ventilation passages and giant caverns for jet fans and substations.

Above ground, inner-city residents and motorists get a sense of the scale – and disruption whenever they pass a massive construction depot for the project on a site that was once the Rozelle rail yards, next to the City West Link roadway. However, the surface work represents only a fraction of the motorway junction below, which features three layers of tunnels.

All up, Australia’s most complex motorway project comprises 24 kilometres of tunnels beneath Rozelle and Lilyfield, about seven kilometres of which motorists will never see because it will be used mostly for ventilation. Once opened late this year, the $3.9 billion interchange will connect the recently opened M4-M8 Link between St Peters and Haberfield, the City West Link, the Anzac Bridge, Iron Cove and, by 2027, the planned Western Harbour Tunnel.

Almost four years after construction started, Rozelle interchange project director Steven Keyser said the focus was now on fitting out the finished tunnels and connecting ‘‘everything together, so it all talks to each other’’ as the targeted completion date looms. ‘‘We have the body built, but we need the brains,’’ he said of the mechanical and electrical systems.

Keyser said other road tunnel projects built in Sydney in the past decade had taught his team that fitting them out with mechanical and electrical equipment often took longer than anticipated. ‘‘We’ve got 1.7 million metres of cabling to run through all those tunnels. It’s a real spider network of cabling,’’ he said. ‘‘The back end takes a lot longer, and we’re scheduling far more intensely to get that right. And so we’re in a good position to open at the end of the year.’’

Keyser said that, while facing disruption from the 2019-20 Black Summer bushfires, the pandemic and wet weather, the biggest logistical challenge for the project had been ensuring equipment and componentry arrived in the correct sequence. ‘‘We had 23 road-headers [excavating] and 500 blue-collar workers starting and stopping each day, getting in and out of the tunnels. This is one of the biggest logistical exercises and that’s all hidden,’’ he said.

Like the rest of WestConnex, the Rozelle interchange has been contentious due to the disruption caused to inner-city residents, and the eyesore it has created near Sydney Harbour during the years of construction.

Transport for NSW’s deputy secretary of infrastructure and place, Camilla Drover, said the project would have been far more controversial if early plans for the interchange had been pursued. ‘‘The original scheme for this was all above ground. Can you imagine? It would have been viaduct and overpasses. But the fact that it is now all underground, and we have a park instead, that is the evolution people forget about,’’ she said.

The 10-hectare park, which includes two sporting fields, on the site of the old rail yards, will open late this year when the interchange is completed.

And Keyser said the public would see the construction site change quickly over the coming months as the park began to emerge. ‘‘We’re getting to the stage where you can see what the finished product will look like,’’ he said.

Underscoring the complexity of the underground junction, the state’s transport agency took control of the project in 2017 from a corporation set up to oversee WestConnex after only one bid from contractors to build it was received in the initial tender process. The interchange was also separated from construction of the M4-M8 Link, which forms the other part of the third and final stage of the 33-kilometre motorway project. The upshot is that the risk of delivering the interchange ultimately rests with the government.

While the tunnels for the interchange average 35 to 40 metres beneath the surface, a sump where water is collected before being pumped out is about 60 metres deep. Twin tunnels for the $27 billion Sydney Metro West rail line between the CBD and Parramatta, which will include a train station next to White Bay power station at the so-called Bays West, will be dug even deeper beneath a part of the interchange over the coming years.

For tunnellers, ground conditions have presented a constant challenge during construction. ‘‘It’s always challenging with ground conditions, no matter where you are in the world. Each time we’re digging the tunnels we’re checking the reactions of what’s happening,’’ Keyser said. ‘‘We’re always a step ahead, probing things, making sure that things are only moving to the model. We have probably 5000 instruments around measuring.’’

While sandstone is easier to excavate, softer soil conditions required so-called rock bolts to be installed closer together in the tunnel walls to provide extra support. The closest the tunnels get to each other is about 10 metres. ‘‘You’re basically doing what the Romans did – you’re creating an arch [in the tunnels],’’ Keyser said of the tunnelling techniques.

About a quarter of the $3.9 billion cost of the interchange, being built by contractors CPB and John Holland, has been spent on a labyrinth of ventilation tunnels and related facilities. Three exhaust stacks about 35 metres high, which are connected to the interchange below, have been built on the site of the old rail yards. Large caverns – some about 23 metres high – also had to be dug deep underground for electricity substations and to house giant fans for the ventilation system.

Part of the reason for the mammoth size of the ventilation facilities is the need to design the interchange to cope with a catastrophic event. ‘‘You’re always catering for what is the worst case, which is if something catches fire in the tunnel,’’ Keyser said. ‘‘The standards now are quite high and the design caters for that emergency situation. In the roof, you have a fire deluge system, which is going through its testing.’’

Greens MP for Balmain Jamie Parker, who has been highly critical of WestConnex, said the interchange’s construction had caused major disruption to nearby residents over the past four years. ‘‘Everyone is relieved that it will be over. But the local community feels like they have had such widespread impacts on their homes, and now they have to deal with the longer-term consequences of the three exhaust stacks which should be filtered,’’ he said. ‘‘The impact is really significant, and it is ongoing.’’

While acknowledging the disruption to locals from construction, NSW Metropolitan Roads Minister Natalie Ward said the interchange, along with the rest of WestConnex, would result in significant travel-time savings for motorists once fully completed. ‘‘There are always challenges in construction – it’s messy; it’s disruptive,’’ she said.

‘‘The upside is it gives local roads back to local communities. This area, you might remember, was just disused rail yards; it was overgrown … [and] you couldn’t enter. We are transforming this to see community benefits.’’

03/12/2022

Children in Care- a Brief History

3 December 2022

One summer evening when I was still a medical student, I was strolling with friends through a festival with stalls and lights in Hyde Park. A young woman approached me and said “I’m a ‘Hookah for Christ, will you come with me?”, and handed me a leaflet. She was a few years younger than I and one of the most stunningly beautiful women I have ever seen. I paused, somewhat shocked, and wondered how much Christ and how much hookah was in this Goddess incarnate and whether I should follow her path to enlightenment. My girlfriend reappeared at this point and was very definitely of the opinion that I should not.

Some years later, in 1992, I had further cause to rue this ignorance as DoCS (Department of Community Services) were involved in a court case with a sect called the ‘Children of God’, who, it was alleged, had used young girls sexually to recruit members for their cult. The sect maintained that the term ‘Hookahs for Christ’ was merely a rhetorical device. The sect had expensive lawyers and won the case , though there was considerable public doubt about the freedom of cult members. DoCs was highly criticised over the case and the Premier, Nick Greiner, cut huge number from its middle management.

Neo-liberalism was new at that time, and his slogan was ‘Putting people first by managing Better’, which was in itself reflected an attitude of the time that managers knew better than those who actually did the work. A contemporary management slogan was ‘If it ain’t broke, don’t fix it’, which tended to translate into ’Don’t spend any money on prevention, as it might not break’. Money spent supporting families has trouble showing big returns on management KPIs. The NSW Public Service was being massively downsized and there are some of the view that DoCS has never recovered from this downsizing, as human organisations rely on human knowledge and if there are just generic managers and new recruits, there is not enough corporate memory and experience to handle cases.

In 1999 when I was in Parliament, I was approached by a number of people telling me that DoCS was failing children at risk. The children with dysfunctional families from drug abuse, alcohol or domestic violence were not getting home support, and the initiation and supervision of fostering arrangements were poorly executed. I tried to set up an inquiry into DoCS. I had a number of NGOs speak to the cross bench. I had to get enough numbers so that there was a majority in the upper house. One of the groups suggested that the UN treaty on the Rights of the Child be a term of reference. This seemed reasonable, but Fred Nile said that he and Elaine would not vote for the inquiry if this was in the terms of reference. Richard Jones said he would not if it was omitted. I needed both of their votes to be sure of the numbers. I thought Richard would fold if I left it out- I was pretty sure Fred Nile wouldn’t. The Liberals, who were in Opposition at the time, were generally up for anything that would embarrass the Labor Government. I asked if they would support it, and told them that if Richard Jones changed, we had the numbers. They said, “We are a serious political party. If you cannot guarantee the numbers, we will not support you”. I regretted telling them about Richard and I did not move the motion. 21 months later the Liberals decided to support the idea, and approached me to amend my motion slightly, which initiated an inquiry (10/4/2002) .

The 2003 Inquiry found that DoCS was indeed dysfunctional . It had contracted out quite a lot of work to charitable NGOs without them having either the funds or the expertise to deal with difficult cases. Huge resources were spent monitoring wayward adolescents to keep them out of the criminal justice system until they reached 16, after which DoCS were not legally responsible for them. Cases did not have much preventive work done or decisions made and tended to stay on the desks of managers ‘unallocated’ until there was a problem . When there was a crisis or the matter went to Court, a relatively junior DoCS person would be allocated the case and have to face a crisis situation. The plans given to the Children’s Court for approval were hastily cobbled together at the last minute, often by new case managers who had only just got the brief. The Government had introduced ‘mandatory reporting’ with a phone and fax Helpline. This meant that there were huge numbers of reports, and huge efforts dealing with multiple reports on the same child or situation, but the call centre gobbled up resources that would have been better spent actually managing cases. The government was reluctant to get rid of the mandatory reporting ’Helpline’ as it was supposed to force schoolteachers etc. into reporting cases, which would leave no stone unturned. The function of DoCS seemed more concerned with appearances than reality and it got a lot of negative press.

Behind all this was the Children’s Court, where the conscientious Senior Magistrate, Scott Mitchell, was about the only quality control on the Department as he insisted in fulfilling his legislated role of ensuring that there was a realistic plan for children placed into custody of relatives or foster homes.

The Minister for Community Services, Fay Lo Po was sacked as was the head of DoCS, Carmel Niland. Neil Shepherd, who had been Deputy Director of the Cabinet Office and Health of the EPA replaced Niland. The Labor government promised a billion dollars over 10 years (most towards the end of the 10 years). Prevention was addressed with a new program, Brighter Futures, but the key problems remained with lack of action on 21% of cases noted by the Helpline, so there was another Special Commission into Child Protection Services in NSW in 2008 by Justice Wood , (who had achieved fame because of his work on Police corruption and paedophiles in 1997 ). Wood was helped by DoCS officers and one of their complaints was the stress that the Children’s Court put them under when they had to front up to Scott Mitchell with their child management plans. The report recommended weakening the power of the Children’s Court, and Scott Mitchell was disposed of by appointing a new President of the Children’s Court, who was to be a Judge- a level higher than Mitchell, who would have had to apply for the promotion that he was not going to get. On 1/9/2009 Attorney-General John Hatzistergos appointed Judge Mark Marien the new President , claiming he was strengthening the Court as he expanded on the new Judge’s CV, which lacked anything relating to child welfare.

An academic researcher, Katherine Macfarlane, noted that even in 2015 there was no data collected on how many Australian children in Out of Home Care ended up in the criminal justice system. She termed it ‘Care Criminalisation’ and noted that this data is collected in other jurisdictions .

It would seem that DoCs, which had a name change to Dept. of Family and Community Services (FACS) and then in 2019 came to be part of the Dept. Communities and Justice, still has its problems .

A report in the Sydney Morning Herald on 28/11/22 noted that a private contractor, Lifestyle Solutions, had subcontracted a child’s care to another subcontractor, Connecting Families and the children in question could not go to school as they were too cold without a winter uniform, despite the payment of $77,000 per month to the contractors to look after them . The Office of the Children’s Guardian has not accredited the Dept of Community and Justice Western NSW District to look after the 547 children in its care as it did not ‘meet the requirements‘ in the frequency of visits and that it had ‘limited evidence to demonstrate the district’s support for children’, its record-keeping was inconsistent, and its work in keeping in touch with families came in for questioning .

The Department has never been run properly. One of my minders in Parliament had worked there and spoke of the immense stress of going to Court almost unbriefed or accompanying Police to take children from the parents to foster homes. One of my patients who is an upper-middle level case manager has been off work on stress for 14 years, with no serious effort made to rehabilitate her.

But when there is no public housing, rents are unaffordable, welfare payments are insufficient to survive on, day care is expensive, Aboriginals are becoming increasingly isolated from both mainstream Australia and their own community leaders, ‘choice’ and subsidies have left poorer public schools as ghettos of disadvantage, inflation is rising and services are now for profit, it is hardly surprising that things are not going well. Anyone trying to put together a stable social situation for a disadvantaged family would struggle without these basic elements.

Society’s systemic problems need to be addressed if we are to return to the halcyon Aussie concept of a fair go.

https://www.smh.com.au/national/nsw/left-hungry-and-too-cold-to-go-to-school-urgent-review-of-children-in-care-20221127-p5c1kr.html

19/11/2022

The Myth of Liberal Competence-1

19 November 2022

One of the enduring myths of politics is that conservatives are better money managers. This is the case in the US, where the Republicans, who enthusiastically dismantle government programs that help poor people and the UK Conservatries who do the same. And it is the case here with the Liberals.

Perhaps the logic is that since they are rich, they must be better with money. But I wonder at the influence of Christianity. The key message is that you must suffer to be redeemed. Suffering is worthy and will later be rewarded. This seems to play into notions that the country will benefit if we all suffer now, ‘we’ in this case being those more dependent on welfare, or those at the bottom of the heap.

The other overarching fact in a market economy the more wealthy people can set the prices, which effectively means they set their incomes. At the bottom of the social pyramid, those at the bottom compete for the jobs and wages set by others. In short, the rich get richer and the poor get poorer. The game ‘Monopoly’ was designed to illustrate this. People play Monopoly, and when they win or lose, they stop the game and go on with life. But what is the game were real and never ended? The losers would get poorer and poorer until they had nothing else to give. That arguably is what a market economy will do without some intervention from an outside force, like a government, to intervene in the cause of those going backward.

Arguably the world’s leading economist is Thomas Piketty. He is a Frenchman who, as he rose, was offered a post in Harvard. He did not take it, opining that economics in the US was theoretical and not based on hard data, as a science should be. Records of national income and death duties going back for 400 years in 4 countries had been put together and he analysed it. His book, ‘Capitalism in the 21^st Century’ is a towering work. It is long, but it is very well-structured with concise conclusions at the beginning and the proof in the later chapters for those who want to read more. He observed that the wages of the population go up at the inflation rate, and the income of the rich who loaned money go up at the interest rate, but the interest rate was always higher than the inflation rate, otherwise there would be no profit in lending. So the income of the rich would always go up faster than the rest of the population, so social inequality would increase in the absence of other interference.

It has always been known that money goes round, and to stimulate the economy people have to spend more. But Piketty points out that poor people spend a greater percentage of their money than rich people. Very poor people spend all the money they have, rich people save about a third. So if you want to stimulate an economy, you should give money to poor people. This is of course not what conservative governments do. They give money to infrastructure, which these days means big private contractors or have industry assistance packages. But these initiatives are giving money to the rich, on the assumption that it will generate more jobs in the long term than the extra consumption would have generated.

(You might ask why Piketty has not got a Nobel Prize for being the first economist to use real data over centuries and come to such a profound conclusion. If you did ask that you might wonder if the Nobel prize economics committee are all neo-liberal economists and you might be right).

The point is without government intervention, the rich will get richer and the poor will get poorer. The best way to minimise this is to have as much shared wealth as possible in the form of park and public facilities, such as transport, health, education and essential services that blunt the significance of income disparities, as a base-line is set without it having the stigma of charity.

But conservative governments, like the Nobel committee want to ignore Piketty and the obvious facts as they do not suit their ideological agenda. A cynic would say that the ideological agenda from right wing ‘think tanks is merely an endless list of convenient reasons to keep the money flowing to the top end of town, to lessen government ‘interference’ which might act for fairness, and to commodify everything such as housing, transport and education so they can become profitable, increase inequality and profit those at the top. How can this agenda ever be considered the foundation of good financial management?

But as Treasurer, Morrison was not even clever in his management of his own revenue. Here is a tale of how his GST deal with Western Australia was out by a factor of almost 10 times over 3 years. Yet the legacy of this shambles is contracts and deal that other have to grapple with.

One of the modest contributions that I am seeking to make to political discourse is to sheet home the blame for failures to the people responsible for them. Here is a start, from the SMH:

Cost of Morrison’s WA GST deal blows out by $20 billion as debt hits record high

By Shane Wright SMH November 14, 2022 — 5.00am

A deal put in place to placate Western Australia when its share of GST revenue was tumbling is on track to cost the nation’s taxpayers 10 times more than originally forecast, helping drive up federal government debt and interest payments to record levels.

Pulled together by then-treasurer Scott Morrison in 2018 before being put through parliament by his successor, Josh Frydenberg, the deal that was originally expected to cost $2.3 billion is now on track to cost more than $24 billion.

WA, which delivered four seats to Labor at the May election on the back of a 10.6 per cent swing, is vowing to fight to keep the arrangement, due to expire in 2026-27.

Morrison struck the deal at a time WA’s share of the tax pool had fallen to an all-time low of 30 cents for every dollar of GST raised within the state. Its iron ore royalties were effectively being redistributed among the other states and territories based on a Commonwealth Grants Commission formula that takes into account each state’s revenue sources and expenses.

Under Morrison’s deal, from 2022-23 WA must receive a minimum of 70 cents in the dollar before increasing to 75 cents in 2024-25. When the policy was put in place, it was expected iron ore prices would fall and WA’s share of the GST pool would therefore rise. Instead, prices have soared.

The Morrison government ensured other states and territories wouldn’t be worse off, which requires the top-up funding for the deal to come from outside the $82.5 billion GST pool.

It was originally forecast to cost federal taxpayers $2.3 billion over three years, including just $293 million in 2021-22, but the surge in iron ore prices has meant more top-ups and for longer.

The October budget revealed that last year, the deal cost $2.1 billion and is forecast to jump to $4.2 billion this financial year. By 2025-26, the cost of the entire deal is on track to reach $22.5 billion, with another $2-3 billion likely the year after that.

Throughout the entire period, the budget is expected to be in deficit, forcing the extra cash to be borrowed. In percentage terms, the blowout in cost is larger than the NDIS, aged care, health or defence.

Independent economist Chris Richardson said the deal had been ill-conceived from the beginning with the cost to be borne by future taxpayers.

He said all significant spending programs needed to be properly assessed, including the GST deal.

“Yes, the politics of it are difficult. But we have a whole host of other issues, like the NDIS, and the economics of them have to be dealt with,” he said.

Any change to the GST deal would create enormous political problems in WA which is likely to gain more political power with an additional seat in a looming federal electorate redistribution.

WA Premier and Treasurer Mark McGowan, who reported a $5.6 billion budget surplus for the 2021-22 financial year, told this masthead he expected the GST deal to remain.

“I have made it very clear that West Australians will not accept any changes to the GST distribution,” he said.

“Those on the east coast who are demanding WA lose out still do not realise that under the reforms, WA will receive 70 per cent of its population share of the GST next financial year. In complete contrast, no other state has ever received a share of the GST lower than 83 per cent.

“WA will continue to subsidise all the other states into the future under this arrangement. No state has lost a dollar under these reforms.”

The extra borrowing for the GST deal has contributed to the lift in gross debt, which on Friday reached a record $909.4 billion.

Ahead of the COVID-pandemic, gross debt was expected to reach $576 billion this financial year. Instead, it is now forecast to reach $927 billion before reaching $1 trillion in 2023-24.

Treasurer Jim Chalmers said the cost of servicing the debt was getting more expensive and was now the budget’s fastest-growing expense.

“We’ve made good progress in a very short space of time. We’ve found $22 billion in savings and kept real spending growth flat across the forward estimates,” he said.

“[But] it will take more than one budget and more than one term of government to make up for a decade of missed opportunities and messed-up priorities.”

05/11/2022

The Twitter Story- and the bigger subtext

5 November 2022
Elon Musk likes to play in every game. His car company existed on hope for many years, but has at last ramped up production. He is in software, AI, batteries, cars infrastructure with tunnelling and trains, space rockets, investments, and now politics.

Twitter has established itself as the world’s political events exchange platform. A new concept like Twitter, which allows direct person to person contact was a good idea. Naturally if there is to be a conversation, everyone has to be in it, so a monopoly system is favoured if the system is new and is seen to work. So Twitter has become unique and immensely powerful. But the technologies that have everyone able to have an equal voice enable radical and socially damaging perspectives to be aired and publicised, legitimised by their ubiquity. Radical groups can link up with others anywhere, adding strength to isolated opinions and tending to lead to discussions that become even more radical and may lead to action.

So the social effects of the new technologies have created new and effectively unaccountable power structures. The regulation of these can be by government edict, as in China, or left to the corporate owners as in the West. Both these regulatory actions and the lack of them are controversial and many have long term political and social effects.

Now Elon Musk seems to have offered to pay too much for Twitter. He tried to withdraw his offer, but was forced to honour it. Having paid too much, he now wants to cut staff numbers radically. I was under the impression that social and political pressure was making Twitter more responsive to concerns about its social and political effect and its staff were part of an effort to minimise any harm it might do. If this is so, it is likely to be, no staff = no action.

So looking at Twitter as purely a financial entity verges on the absurd, but that is what is happening. And a financial mistake by Musk, and his corrective action in sacking people may have considerable effects. Commentators are already talking about the polarisation of US politics and the rise of violence with the storming of the US Capitol and the easy and unsophisticated attack on Paul Pelosi.

So the subtext of the situation is that an unregulated world market allows the immense concentration of power such that when the world’s richest man corrects what is for him a relatively minor financial error a major world information system is significantly disrupted and may become dysfunctional. (Whether it was considered dysfunctional before is a matter of opinion- it is hard to get an exact understanding of how much power the Twitter information model has).

One of the more ridiculous features of our society is that those with money, or who know about it are assumed to know about everything. They know about money, and have usually specialised in making it to the exclusion of other concerns. Often, it is dubious that they have the faintest idea about the implications of their actions.

Because the world’s economy advisers have allowed the world to become just a market we have the equivalent of elephants in China shops and we wait and wonder which way they will turn. A more cynical view would be that we have a situation where the playthings of the rich can have massive uncontrolled consequences and there are no regulatory mechanisms that have either the will or the power to influence the situation in the public interest.

The jobs of the Twitter employees are the tip of a very large iceberg, and the stories of Twitter’s share price have a much larger subtext. Here is an article from today’s SMH:

Twitter staff shut out as global purge starts
Zoe Samios, Nick Bonyhady

Twitter Australia staff were being locked out of their company accounts yesterday as billionaire Elon Musk’s job cuts hit the local office in Sydney, which employs about 40 people.
Musk told confidants he planned to eliminate half of Twitter’s workforce to slash costs at the social media platform he acquired for $US44 billion ($70 billion) last month.
Local staff in marketing and news curation were shut out of Twitter’s systems after receiving an email signalling layoffs but without any official confirmation that their jobs were being axed. Others were waiting to see if they would still have a job come Monday.
One employee said there was a sense of relief. ‘‘It’s not the company that we joined, and it’s not the app that we all love any more,’’ they said.
Others familiar with the company said the news team, which selects articles on topical moments in the national discourse, is among the largest local units and had about 10 staff. Some communications staff for the Asia-Pacific region have also been locked out.
Twitter’s local public relations representative declined to comment.
Australian staff received an email yesterday morning saying Twitter would ‘‘go through the difficult process of reducing our global workforce’’. Staff were to be told whether they still had a job via email by 9am Pacific Standard Time, or 3am AEDT yesterday, but the lockouts started early.
‘‘We recognise that this will impact a number of individuals who have made valuable contributions to Twitter, but this action is unfortunately necessary to ensure the company’s success moving forward,’’ the email, which was obtained by the Herald, said.
The Herald revealed in July that Twitter was closing its Australian office in Sydney, with staff to work from home.
All told, Musk wants to cut about 3700 jobs at San Francisco-based Twitter, people with knowledge of the matter said this week. The entrepreneur had begun dropping hints about his staffing priorities before the deal closed, saying he wants to focus on the core product.
‘‘Software engineering, server operations & design will rule the roost,’’ he tweeted in early October.
Twitter was sued over Musk’s plan to eliminate the jobs, with workers saying the company is doing without enough notice in violation of federal and California law. A class-action lawsuit was filed on Thursday in San Francisco federal court. The federal Worker Adjustment and Retraining Notification Act restricts large companies from mounting mass layoffs without at least 60 days’ notice.
Security staff at Twitter’s San Francisco headquarters carried out preparations for layoffs, while an internal directory used to look up colleagues was taken offline on Thursday afternoon, people with knowledge of the matter said.
Employees have been girding for firings for weeks. In recent days, they raced to connect via LinkedIn and other non-Twitter avenues, offering each other advice on how to weather losing one’s job, the people said. with Bloomberg

01/11/2022

Want to know about high energy prices?

4 September 2022

It is about market failure. When public power utilities were privatised a market was set up and power producers could bid into a market to supply at a certain price for each period of time. But obviously if someone bid in at a low price for part of the market, they would then watch as others bid in higher and made more money. So the price to all producers was set at the last bid, so the cheap producers made a lot of money.

There were a few problems. The amount of electricity needed varies widely. Coal fired power is not very flexible-it needs a constant load, cannot be stopped and can vary its output only slowly and within a limited range. When renewables came, solar is only in the daytime, and wind varies, so the system had a problem with ‘stability’- the ability to dispatch power when it was needed.

Another problem was rorting, though no one wanted to talk about this. There were big players who could withhold power so that there was a shortage; the price went up, and then they all cashed in. ‘Imperfect competition’ as economists would call it. No one wanted to build coal plants and there was not enough storage to let renewable energy last overnight or for dull or windless days. So the Morrison government said that gas was a ‘transition fuel’ and more gas plants would be built.

Meanwhile the Australian gas industry agreed to massive export contracts on the assumption that they could frack Australia as the US had been fracked. But the environmentalists realised the harm this did and resisted. So our price of gas went up. So the companies pressured the Albanese government, which is now breaking its election promises and approving fracking. Sorry environment- what is a bit of permanently polluted groundwater and desertification between friends?

Of course years ago, publicly owned utilities run by professional engineers were charged with providing electricity and gas to the public on a non-profit basis. They charged enough to cover their costs with some money for maintenance and future planning. The price was the average price of generation, not the most expensive component. The model worked quite well and could again. The change to a ‘market’ was ideological.

At an international level, the problem is similar, but it all being blamed on Russia, which is only partly true. Naturally in a globalised world, we are also affected by the European gas market, but less directly, especially if we frack to get out of it; which is a very bad solution, substituting a long-term problem for a short-term one.

Here is an international article:

https://eand.co/this-is-why-your-energy-bills-are-going-through-the-roof-cc99e2a59d12

16/10/2022

‘It’s the Monopoly Game Stupid’

13 August 2022
In case you missed it, that is a misquote of Bill Clinton’s 1992 election mantra, ‘It’s the economy,
stupid’. (He beat George W Bush when the US economy turned down).
Other apposite quotes are Stalin’s ‘The only thing I believe in is the power of the human will’ and
Mao Tse Tung’s ‘Power comes out of the barrel of a gun’.
The Stalin and Mao quotes relate to the power of governments, Clinton’s the power of economic
forces. It seems that the economy is more powerful than governments, as it was responsible for the
collapse of the Soviet Union, and the current rise of China is partly because they have a new model
where they set the rules for the economy.
The other variable more powerful than governments is technological innovation as it totally changes
the way we live, but this is not a point I want to discuss now.
The two Wars last century were over access to markets, so at the Bretton Woods Conference in 1944
that set the rules for a post WW2 economic system the object was to eliminate trade barriers so that
countries that were doing well would rise, and those doing poorly would fall, all this happening
gradually and without wars. This has turned the whole world into a market, and because money
crosses borders so easily, big companies can take over smaller ones, and governments, being
restricted by their borders have their powers limited. The ability to move jobs offshore makes
workers compete globally.
As governments’ power has fallen relative to big companies and the best brains in the nation go into
companies rather than into government, many governments do not believe that they can defy big
corporations. The Australian governments following the interests of the mining lobby and the
Murdoch press are just a couple of examples. Another is the tax and (non-)royalty system, and yet
another the drive to privatise public utilities as Capital wanted the returns from performing certain
functions that had previously been done by the public service for no profit. The governments did
not have the courage to say ‘No’, particularly as the companies were generous donors to the
political parties.
As in a Monopoly game, the rich get richer and the poor get poorer unless there is government
intervention, and even this has limits.
As we struggle with rising inflation rates, falling relative wages, house prices supercharged by 40
years of negative gearing and manifestations of rising inequality, we need to look at the root causes
and to what extent they can be modified. Governments need to rattle their cages domestically and
cooperate more internationally. Is Albanese up to it?
www.thesaturdaypaper.com.au/news/politics/2022/08/13/how-tax-bludgers-are-ripping-their-
fellow-australians