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Category: Market Failure

14/07/2021

The Broken Bargain- Australia Institute Webinar

14 July 2021

Sally McManus, ACTU Secretary looked at Australia’s growing wages crisis in a 1 hr webinar at 11am today.

She told of how the Australian system of award wages had been world-leading with its concept of a ‘fair go’, and it had an outcome similar to the Nordic countries. This has, however been in retreat since 1975 with the rise of neo-liberalism and trickle-down economics as the dominant political philosophies.

Perhaps the most amazing fact in the webinar was that the workers share of GDP in 1975 was a record high of 54%, but has declined by 10.4%, and this has gone to the corporate sector. The amount in dollars is $200 billion a year. While wages growth in Australia has been generally below the CPI, wages recently actually overtook the CPI briefly. However, as McManus points out the CPI is composed of discretionary goods, which tend to be imported and more luxury items, and necessities. The discretionary component has not risen as fast as wages, but the necessities component has risen faster. So the lower paid, who mainly spend on necessities have gone backwards relative to the most important component of their spending. McManus estimates this at $20,000 per waged worker.

She identifies poor bargaining power as the cause of the change in the distribution of Australia’s wealth. According to the RBA (Reserve Bank) temporary workers have kept wages down. This is partly, but not wholly, workers on visas who are a group likely to be a whole sector vulnerable to wage theft. But Labour Hire companies have also lowered wages and conditions as workers can simply not be offered any shifts.

Visas have also been used to avoid training people. TAFEs have been run down and overseas workers’ skills have been used to save money on training. This has improved short-term profits but deskilled the country- a bad strategy. It has relied on foreign training.

COVID has been used as excuse for the economy not doing well, but it has not led to a revival. 60% of new jobs since the last lockdown have been casual, and 57% are part-time.

Another Australia Institute IR expert, Jim Stanford, commented that Australia’s IR system was unique, but the changes since 2013 had severely limited the ability of workers to bargain. Only restricted aspects could be discussed, and conditions could easily be traded away. Even the ILO (International Labour Organisation) has commented on this. The casualisation of the workforce has been facilitated and most recently this has been a significant factor in the spread of COVID.

The webinar will shortly be available at https://australiainstitute.org.au

10/07/2021

NDIS Individual Assessments; A Symptom of a Wider Problem

10 July 2021

The current issue in the NDIS (National Disability Insurance Scheme) is the government’s efforts to introduce ‘independent assessments’ of people on the scheme and those who want to get on the scheme. The idea has been abandoned for the present, but that is not the end of the story. It is the beginning.

Some context is needed here. I was on a State Parliamentary inquiry into disability funding during which we heard evidence of inefficiencies within the disability sector where often there were shortages of appropriate services, and in some areas there were none at all. The real crunch time was when parents with children with disabilities realised that they were going to die eventually and wanted to make a plan for the rest of their child’s life. People would apply at various facilities, and be turned away as there were no places. They then assumed that they were on a waiting list, but usually no lists were kept. When a vacancy occurred, whoever applied at that time got it. It was mainly luck. Naturally the people trying to help their loved one wanted a guaranteed package that would continue after their death. More articulate parents and carers, who had struggled for years just wanted the money to buy the services that they felt that they needed. Many carers simply wanted more services, and hoped that a national system that guaranteed services for disability.

Given the political context of privatisation and reducing government involvement in everything, the scene was set to have disability services delivered by the private sector as a massive market for services. The private sector naturally wanted to get access to services that had been provided by government as a source of business and profit.

Government also had a real estate agenda. Some large institutions were on valuable land. The large facilities at Peat Island in the Hawkesbury and Stockton Disability Centre was on beachfront land just north of Newcastle. There was a residence for the grossly disabled opposite Wollongong Hospital that had taken years of fundraising for the parents to achieve. These could be sold off as the mental health facilities had been a few decades earlier, with the catchy slogan of putting the residents ‘back in the community’. The idea that the residents were better off isolated in a suburban homes with few facilities rather than in a community of people with the same problem and a well-structured programme of activities seemed a dubious proposition to me. Resident groups such as the relatives of long-term psychiatric facilities at Bloomfield in Orange were very scared of the suggested changes. There had been problems with the old system and some inappropriate facilities, but an overall lack of facilities was the major problem. It was not even throwing the baby out with the bathwater; it seemed more like smoke and mirrors.

The key question in dealing with any problem is how big a task is it? When the Committee asked how many people with disabilities there were, there was no answer. No register was kept. The two ways of calculating it were:

To add up all the people on all the types of possible benefits and get to a total.
To look at the AIHW (Aust. Institute of Health and Welfare) figures of what percentage of the population was disabled, then multiply this by the total population.

The latter method gave figures about ten times greater. So clearly if help or services were made more available, the numbers involved were going to blow out hugely from what was currently funded.

John Howard passed the Aged Care Act in 1998, which was the blueprint for the privatisation of the sector. Old people are very vulnerable. They have often sold the family home, so they are temporarily cashed up, looking for accommodation and long term care with mental and physical facilities failing, or they would not be there. Carers faced with responsibilities that they were not used to and uncertain of what care was needed were easy pickings also. The whole sector is more like a dysfunctional real estate market; a market failure due to insufficient ‘consumer information’, but also distorted incentives and priorities.

The NDIS was similar. Private operators with slick marketing made promises which would not be tested for some time, but people were signed up now. The not-for profit sector had never paid staff well, but most had a ‘care ethos’. Some of the private providers did not, and regulatory supervision was minimal. The government was pro-business and trying to give away responsibility.

But an absolute shortage of services was still a big factor. A neighbour who was a 95 year old retired academic widower wanted 2 hours a week of home help. For some reason he could not get a community nurse. The best deal he could get was 2 sessions of 2 hours at $65 an hour. The lady delivering the service was paid $21/hr. So much for private services; the ‘overheads’ are huge. I had suggested to Kevin Rudd’s 2020 Vision in 2000 that the Government needed to licence service providers as individuals if they wanted a market model, and our neighbour could have selected a person on a one to one basis. (I never even got an acknowledgement).

Now the government wants ‘independent assessors’ to evaluate cases, presumably to lessen costs. A number of points can be made about this. It assumes that the assessors will learn more about the patient in an interview than the people who work with them already know. The new management philosophy since the 1980s always assumes that a manager at the top will know more than the person actually doing the job. Naturally if the object is to save money and have the person at the bottom paid minimally, requiring no skills and interchangeable in staffing, this may be true. But if the people at the bottom were respected, trained and empowered, the need for the middle level experts might be much less.

‘Independent Medical expert’ assessors are used in the Workers Compensation and CTP systems. They work for agencies hired by insurance companies. Often they find the patients either have nothing wrong with them, or it is degenerative and not related to their injury. These experts are even flown from interstate and save insurers money by denying treatments. Presumably if they find in favour of the patients, their agency gives them less work. The agency takes its cut and has to please the insurer. So the systems are more complicated and an ever higher percentage of the money is spent in trying not to give services. The NZ National Accident Compensation scheme, though it was government owned, went to a private insurance model and the same thing happened. Doctors who had a track record of denying liability were flown around the country to do their medicals.

The assumption may still be that well intentioned assessors still can do better. My widowed mother lived alone in the family home and had a stroke. A neighbour noticed her confused, walking on the balcony. She recovered, but seemed to have lost some judgement. She was assessed by an ACAT (Aged Care Assessment Team) who said that she could live alone in supported accommodation. So we got her into a unit in the grounds of an old house, where she could book a dinner at a days’ notice in the communal dining room, have a nurse onsite during the day, and had a right to a nursing home bed if she ever needed one. Seemed perfect. She said that she could look after herself. Can you microwave a dinner? Yes. OK. Do it. It got done. No problem. Dinners in the frig. Sweets in the jar on the mantelpiece; see you in 2 days. Arrive in 2 days. Dinners still in the frig. Lolly jar empty. Very hungry- can we go to lunch? She could do anything when asked, but could not initiate a process. She could not think to get a dinner from the frig, or book lunch tomorrow in the communal dining room, nor ask for help. The one-off team could not pick this. Neither did the family. But it emerged when the situation at home was known. This is just a story, but a carer who is savvy and properly trained will know more than a university-qualified assessor who has only a short knowledge of the patient. And naturally the person on the job actually delivers the service and is not an extra cost. They can also judge relative needs of people on a run or in an area if resources are limited.

So the scheme to bring in assessors is the tip of an iceberg.

Private insurance models have huge problems at many levels. The overheads of Medicare are a bit under 5%. The overheads of Private Health Insurers are about 12%, and they cannot refuse to pay doctors. The overheads of US Health insurers are about 12-36%, as the best way to improve profits is to cut costs (payments to patients) rather than increase services and then try to prove you have and sell on that basis. At the bottom of the efficiency barrel is our own NSW CTP system with overheads of almost 50%. The question has to be what is the focus of the system? Delivering services, or saving money? The US health insurers, like our CTP scheme are very good at making money. What they make their money from just happens to be people rather than widgets. The main cost savings of privatisation seems to be destroying award conditions and lowering ‘staff costs’. The immense administrative savings from universal systems, where determining entitlement and paying for profits are eliminated cannot be matched by any private system, despite what the ideologues might pretend.

The NDIS is currently a fund supposedly to help people with disabilities. These people apply to get ‘packages’ of money and services. Businesses persuade people to spend their packages with them. It is a market. But there are more people with disabilities than was expected, for the reasons discussed above. So a new level of assessors, were to be rolled in, but a huge outcry has prevented this temporarily. But the problems that led to the need for the assessors remain implicit in the design of the NDIS, which is fatally flawed. The government, particularly this one, is not going to take this very large bag of lollies from the private sector. The totally inefficient Private Health Insurers (PHI) give money to political parties and advance by stealth, letting Medicare become irrelevant for health care. Disability is now also privatised, and a new private lobby is in there. It has not yet generated a Royal Commission into its rip-offs, but it will, not that the Aged Care Royal Commission has stopped the privatisation of aged care. The political forces are too great. It is ironic that as Medicare is starved and pays less and less of the doctors’ fees its levy was increased, using a wave of sympathy for people with disabilities to make a bigger pool of money for increasingly private disability providers.

How to fix the problem?

I do not pretend to have all wisdom on this, but in dealing with difficult political problems I think it is wise to set a direction, take some basic steps and consult widely, looking for advice particularly from those who do not get an immediate financial benefit.

Here is a start:

Recognise that disability is not a sickness. Some disabilities are inherited; others are acquired due to accident, illness or aging. The sector is quite diverse, often divided up by the type of disability or how it was acquired. Sickness has an ‘episode’ model, based on traditional infectious diseases or surgical treatment models. Disability tends to be long-term and may improve or be worked around, or may degenerate gradually. As such it needs long-term solutions like welfare, but using the term ‘welfare’ now implies charity. Disability funding is funding to enable those less fortunate to have as normal a life as possible. From our common wealth, we give more to those who need more so that our society has equal opportunity for all. We are being taught that tax must be minimised and if we are getting less than we pay we are being ripped off. A better model is to consider the statement by Rhonda Galbally, ex-CEO of VicHealth, ‘There are two populations, the disabled and the not-yet disabled; if you are lucky enough to be in the second group, you should be happy to help pay for the first’.

The idea of a universal service obligation is the cornerstone. We should start with the assumption that people with disabilities should live in our society with as normal a life as possible and we should adapt to support them in as cost-effective way as possible.

My suggestion is that the Community Nursing service is the basic structural framework. We assume that people with disabilities will be living in society, and need varied and integrated support. If they are born with a disability or acquire one, they will come in contact with the acute hospital system, which will hopefully document their situation and alert the community support system. People on the ground will then liaise with family to see what support there is for independent living, and organise resources, calling in specialists of required. The cost of home support may be part of a package or allowance. Individuals may register to offer services for everything from shopping, cleaning and lawn mowing to medical or paraplegic support services. The government will register and insure both practitioners and those who use their services and may put training requirements on those who wish to register for some skills. A market with consumer feedback as exists for restaurants or other practitioners will allow people to hire help directly without big corporations adding massive overheads.

Whether the monies are paid separately of via Centrelink is an administrative question, but Centrelink has to have a major makeover so that it is not the niggardly decider of the ‘worthy poor’ with its chief function being to avoid paying anyone, or paying as little as possible. If society cannot find everyone employment, we must share what we have to those who are disadvantaged by disability or circumstance. This will collide head on with the problem of increased numbers of those with disabilities, but the extra load must be seen as part of having a decent society.

The way we are going seems to be privatising, allowing huge profits, then running out of money and shutting the gate on those who do not yet have packages. The independent assessors were merely the instruments of Managers who were not able to make their own assessments and did not trust the people who actually deliver the services. The assessor problem was the tip of the iceberg of a system that has all its underlying assumptions wrong, but sadly has a lot of political power that having been created, may not be able to be undone. The first step is to understand what is happening. Hence this lengthy post.

www.abc.net.au/news/2021-07-09/ndis-disability-independent-assessments-model-dead-after-meeting/100277324

04/07/2021

Collapsing Buildings

4 July 2021

The collapse of the front wing of a 12 storey Florida beach residential tower block on 24 June has sent shivers around the world. The rest of the building, more than three quarters of it, is now to be demolished before a tropical storm comes in (ABC News today). Another similar condominium 8km away has been evacuated (SMH- Unsafe Florida Condo evacuated 4/7/21).

It has always been assumed that tall buildings do not fall down in first world countries unless earthquakes are very bad. We need to look again.

I did a locum in Sydney’s Eastern Suburbs in the early 1980s and found that a number of quite famous and prestigious buildings were being treated for concrete cancer, which is what happens when the steel reinforcing rods rust, expand and the overlying concrete flakes and falls off. Presumably the treatment of the Eastern Suburbs buildings was successful as they are still there. When I was at Sydney Water head office, it had a 7 storey old part from 1927 (which is still there repurposed as a hotel) and a ‘new’ building, which was 26 floors in concrete. Though not at all pretty, (the word brutalist comes to mind), the new building had won an architectural award. A fortune was then spent removing the asbestos. Some years later a nice big front overhang was built over the footpath outside. I discovered that this was because the concrete cancer was so bad that bits of it were falling off and might be dangerous to the citizens on the footpath outside. None of that was mentioned at the time of course; that building was demolished some years later.

When I visited Cuba in 2007 the buildings along the foreshore in Havana were all 1930s reinforced concrete two or three storeys high with concrete balconies with concrete balustrades and handrails and the sort of scrolls holding up the verandahs and around the doors. Art deco if I am not mistaken. But they had concrete cancer bigtime and the balconies were literally falling off. As you walked down the footpath, some areas were roped off in case there were more falls. Some houses were condemned, which seemed just to mean that they were full of squatters rather than owners.

It is not clear whether the building falling in Florida was poorly constructed, whether it got concrete cancer, or whether the sand shifted under it. Presumably we will know eventually.

Back here in Australia the wave of deregulation in the early 1990s led to the privatisation of building certifiers, and the distorting effect of real estate money, surely the biggest problem in Australian governance, has hugely affected building standards. We have seen the fiasco of the Opal Towers building at Olympic Park in December 2018 (SMH 24/12/18), and Mascot Towers (SMH 15/5/19). We now have a new building inspectorate and the new NSW Building Commissioner seems aware of the problems. But Body Corporates do not want to report their defects. No doubt they are fully aware that if they do their property values may be totally destroyed, or at best they will be up for a fortune in repair costs if the problem is fixable. So the answer is to hide the defect if you think the place will not fall down.

The Building Commissioner says that there are 200 apartments on the lower North Shore with ‘scandalous’ defects.

When I was in Parliament it was drawn to my attenti0on that air-conditioning ducts often went through supposedly fire-proof walls, as did plumbing that was not sealed off around the pipes. One of Sydney’s major apartment builders and generous political donor was named, and I asked a question as to how many building were there in the Sydney CBD that the Fire Dept. had declined to certify as safe for occupation? I never got a quantitative response, but the company in question sued the Sydney City Council for being slow in issuing certificate of occupancy. I guess that they thought attack was the best form of defence.

A little known fact is that insurers will not insure buildings over 3 storeys.

The system of private certifiers is a farce and the chickens are likely to come home to roost. How do you buy an apartment now?

Inspectors have to have the power to refuse and guaranteed employment, so that they cannot be bullied or blackmailed. Then there have to be protections against corruption. A head of a planning dept. that I knew banned meetings in a certain coffee shop that was known as a place where developers spoke to public servants, banned meetings on a one to one basis and insisted that there be minutes of every meeting and that only what was written down was to be considered as binding. He had lessons on ethics and acceptable behaviour, but admitted, ‘I cannot check on everything’.

www.smh.com.au/national/nsw/construction-watchdog-body-corporates-are-not-reporting-known-defects-20210630-p585hh.html

03/07/2021

AUSTRAC and the Banks- is this the Model of Regulation?

3 July 2021

AUSTRAC (Australian Transaction Reports and Analysis Centre) is a small regulator compared to ASIC (Aust Security and Investment Corporation) and APRA (Aust Prudential Regulatory Authority). But when Paul Jevtovic was transferred from the AFP (Aust Federal Police) to run it, it charged the Commonwealth Bank and Westpac with not reporting financial crimes adequately and fined them a total of $2billion.

Those who us who think that unpunished crime is rampant in the big end of town cheered, and wondered if there was any hope that this might set a new norm; regulators might actually start enforcing regulations. My private hope that they might move from banks to insurance companies, whose antics make the banks look like saints. But I note that the National Bank, who seem the next cab off the rank have just got Jevtovic to come to them to help them clean up their act, and the new CEO, Nicole Rose is known for a less aggressive style. This worries me. Regulators with gentle styles seem to prosper in the bureaucracy, and one might be willing to bet that the National Bank may change its behaviour just in time and be hit with a much lower fine. Presumably the saving will make Jevtovic’s salary look like chicken feed.

What is needed is a Police model. People speed and get fined. The Police expect them to speed, so have no qualms about fineing them. It should be the same for corporati0ons. If they can make money doing something they will. That is what Milton Freedman told them to do and what their shareholders want. If you want them to work within another framework, like an ethical one that lessens their profit, then you had better enforce that framework or it will be empty words. Police understand that. Generally ambitious bureaucrats choose not to understand it.

The Headline is about the Banks fighting financial crime- do they really care or is it just when AUSTRAC makes them?

We have to hope that Jevtovic’s move is not just another aspect of the new regulatory model.

www.smh.com.au/business/banking-and-finance/dirty-money-how-the-banks-and-austrac-are-fighting-back-against-financial-crime-20210625-p5849c.html

10/06/2021

NDIS= Privatisation of Welfare

10 June 2021

It seems that the most sacred duty of corporations is to make as much profit as possible in the framework that they are in. So unless the framework restricts what they can charge and make, why would anyone expect them to behave differently?

It seems that the ‘not-for-profit’ sector is drawing from the same managerial pool, with the same ethos and expensive tastes.

My view is that a strong home support system with community nurses as its major foot-soldiers would be in the best position to assess need and relative need and bring in extra services as required.

The current top-heavy, privatised, hands-off NDIS model with ‘experts’ who do not know the people dropped in a short notice to dispense individualised packages rather than an overall programme is a sure recipe for rip-offs or resource misallocation.

Expect more examples of rip-offs until the model is changed.

www.abc.net.au/news/2021-06-10/is-ndis-provider-putting-growth-above-disability-care/100199988

28/05/2021

CTP Insurers Pay 6.3% of Premiums to Injured People. They keep the rest.

28 May 2021

This is a huge corporate scam. Why do people think that only little people are rip-off scammers? Also the idea that most people claims are ‘accepted’ is a nonsense. Insurers accept the claim, which means that they pay for a few GP visits and some physio. But they refuse to pay for scans that might find diagnoses. Then they refuse to pay for referrals to specialists who might need to operate. Then they refuse to pay for recommended operations. Then they use tame doctors (IMEs = Independent Medical Examiners) who either say that the condition does not need the treatment or that the problem was there before the accident so the insurer is not liable.

So the government introduced the PIC (Personal Injury Commission) to arbitrate all the claims that the insurers had refused. Now the waiting time for the PIC is over a year, which suits the insurers fine as the doctors and patients will use Medicare or private heath insurance to get the treatments and the insurers will either pay less or not have to pay at all.

If you thought the banks were bad, you have not dealt with insurers. NRMA refuses a considerably higher percentage of treatments than anyone else in my statistics, and SIRA declines to keep statistics on the ‘industry’ as a whole, and no insurer has ever been prosecuted for refusing a treatment.

This is why we need Medicare- a single, just, efficient, universal health insurance scheme.

www.youtube.com/watch?v=Sp8R856f7cM

01/05/2021

Fake Facebook Pages Allow Dictators to Rule

1 May 2021

A Facebook whistleblower, Sophie Zhang, says that in many countries fake pages are distorting perceptions of politicians and trolling opposition leaders. She says that while there is some interest in this in the Western Democracies there is not much interest in countries like Honduras, Azerbaijan, Mexico and the Philippines. Clearly if action is delayed in these areas politicians may win elections, distorting whole nations’ futures.

Sophie Zhang was a low-level data analyst who found this and tried to get Facebook management interest, but was continually rebuffed and finally sacked.

Marx said that ‘Power is control of the means of production’ in that it gave access to money, but now it would seem that power is control of the means of information. This is why Murdoch and Fox are so powerful. With 70% of Australia’s print media a drip-feed of negative stories can get rid of governments.

My personal view is that the fact that Rudd would not change the media ownership laws in Murdoch’s favour was why Rudd fell, though of course his two other key policies, a carbon tax, and royalties on mining offended the mining lobby. Offending both Murdoch and the miners was terminal.

Apart from the mainstream media (MSM) the other significant media player, which the population think that they control, is the social media, particularly Facebook. We might ask whether it determined the 2016 US election that elected Trump, or the 2016 Brexit vote. My more recent view is that my own personal lack of awareness of the power of social media probably cost me my seat in NSW Parliament.

Be all this as it may, Sophie Zhang has raised a very important issue in the power of Facebook and the clash between its commercial interests and its social function. Like many whistle-blowers, she is a hero who has suffered for her efforts.

www.theguardian.com/technology/2021/apr/12/facebook-fake-engagement-whistleblower-sophie-zhang

16/04/2021

Skilled Migrants Needed as we stopped training people.

16 April 2021

I note in Australia’s recovery, we now need skilled migrants. Why? Because we stopped supporting TAFE and gave the money to dodgy private providers.

At the other end of the pile we need unskilled migrants to pick our fruit because the wages are so low that Australians do not want to work for them.

Where are young Australians in all this? Are our kids going to unis with no jobs at the end of their courses? In India excess doctors drive taxis. Marx said that the capitalists were more loyal to their class than their country. Are we for a fair go for all Australians of not? A living wage? Or are skilled migrants who settle more likely to vote Liberal?

www.abc.net.au/news/2021-04-15/skilled-migrants-missing-link-australia-covid-economic-recovery/100069670

16/04/2021

Amateur Hour in Management and Politics.

16 April 2016

When friends discuss why the world of politics seems to be going downhill, they mention that there seems to be no respect for knowledge any more. Because information is so available it is not valued. But this is not the key. The problem seems to stem from two sources;

Firstly the two wars last century were over markets and at Bretton Woods at the end of WW2 the key to preventing wars thought to be free markets, where there would be unrestricted trade and countries could rise on fall on their relative advantages, or harder work. The second item was the notion of neo-liberalism where the duty of a company was to make as much money as possible, with other objectives being looked after by someone else. But as free trade progressed like a monopoly game multinational companies became more powerful than governments, so there was no one to stop the accumulation of wealth and power. Power and wealth became the important items. If you had these, clearly you would know what to do.

A number of small stories often give insights into changing priorities. When I was at school and aged about 11 another boy, Geoff, went on a trip to the USA, a rare thing to do at that time. We eagerly asked him what it was like over there. He said, ‘Money just stands up and talks over there. If you have money and you say something everybody listens’. What he meant was that it was not because the rich person actually knew anything.

When I worked at Sydney Water, there were 17,000 employees and there was had a program to separate storm water and sewage in the pipes in the old part of Sydney, where they had all been the same. There were employment programs for the long-term unemployed, disabled people and even ex-prisoners. There were quality control units and a well-respected apprentice training school with about 220 people that produced plumbers, electricians and carpenters. The staff worked their way up the hierarchy so everyone knew their job and the tasks that they were supervising. In the early 1980s these was a major change. Sydney Water was reclassified as a State owned enterprise. It was to be ‘right sized’ which was the euphemism for downsized to about 3,000 people. All functions not immediately necessary were stopped. No pipe replacement programs, fix them when they burst. No apprentice training. No quality control- (has to be out-sourced). No printing. No computerised land mapping program (a world first, given to the Land Titles Office and later privatised) and the government was entitled to a ‘dividend’ from the enterprise which was about a billion dollars a year from all the salaries saved and work not done. There was a game of musical chairs which went on for about a decade with new management structures, each with fewer places in it, where people repeatedly applied for jobs that had slightly different titles but which amounted to what they had done before. But more than this there was incredible nepotism and people who knew about money or were politically favoured replaced those who knew about pipes and water. Deskilling was on a massive scale. Then there was a project to look at salary relativities, which seemed to come to the conclusion that the salary should relate to how many people you managed. Professionals were hard to fit into this framework, so it was opined that they should get less, but in order to get them at all, there had to be some consideration of what they were paid outside the organisation. As a professional I was also high enough up the hierarchy to get ‘management training’. It seemed that the key objective was to create a new culture in the organisation, and the main element in this was the destruction of the old culture, which was naturally assumed to be inferior to the new vision of the new management. Workshops were held to define our objectives and visions. The silly old guard had thought that it was to provide water and take away the pooh.

This seems to be what has happened throughout the entire public service. Lifetime employment has gone, and the gradual salary increments that made public servants content to work for less because they had lifetime security of employment and respect for the niche knowledge that they had developed.

Now the two overwhelming values are power and money. They are assumed to go together. Money buys political power, and political power gives control of large amounts of money. So part of this new values hierarchy is the assumption that other values are lesser. Public interest knowledge as stored in the public service, the Australian Bureau of Statistics or the research community are run down as the new breed of consultants rise. The consultants are chosen by their masters for their political or economic orientation and have to come up with solutions that fit with the views of their masters lest they not get their next job. It is an incestuous and nepotistic system where ideology and opinion have displaced long-term experience and expertise.

Some years ago, as a NSW Democrat MP, I went to a YADS (Young Australian Democrats) conference in Canberra. The YADs were enthusiastic young people interested in politics, and some of them were lucky enough to work in Parliamentary offices. On the Saturday they hospitably asked me to come to a party that they were attending. I felt a bit old for the group, but they insisted. It turned out that the Party was at a Liberal staffer’s house. No one took much notice of the old guy in the corner sipping his beer, so I observed a group of very privileged young people telling stories of their exploits in the corridors of power. The striking part of the stories was the extent to which they were merely playing a chess game. They were the goodies, Labor were the baddies and the whole discussion was about winning. There was no policy content at all. The issue was whether we won or not. John Howard was Prime Minister and I was left with the overwhelming feeling that power was in the hands of those who had neither knowledge nor respect for the responsibility that they were carrying.

So I was interested to read this article by Jack Waterford, which traces the replacement of the public service by political staffers, ambitious non-experts with a lot of ideological baggage and little time for long-term expertise.

The replacement of respect for knowledge with respect only for power and money may be the reason for the decline in decision-making in our political and management systems, and may yet be the cause of the decline of Anglo civilisation.

Morrison’s minders at the heart of his doldrums

19/03/2021

Murray-Darling Farce- Another Summit.

19 March 2021

One of the more absurd ideas of neo-liberalism was to privatise ownership of all the water in the Murray-Darling and then rely on ‘the Market’ to allocate the water optimally. All that happened was that water was another commodity to be traded with its price more related to its possible future price than any physical or environmental constraint.

I learned a bit about this many years ago from my grandparents. One of my grandfathers was a retired metallurgist who would tell me about world trends in metal demands and buy shares accordingly. His wife, my grandmother, knew nothing about this but would buy shares based on what the market was doing and tell me separately about how she despaired of my grandfather’s share investments. After a few years, she was much richer than he from a much lower base. The moral was that the share price had little to do with reality.

Why anyone would think that turning water into a speculative commodity would optimise its use is beyond understanding. But that was what happened. Joh Bjelke-Peterson built Cubby dam on the Queensland border and used the water to irrigate cotton, so NSW was behind the 8 ball from the start. NSW cotton farmers used surface water and took water from aquifers with no supervision of their meters. Brokers with mobile phones bought and sold water entitlements, and famously recently a Singapore-based company sold a lot of water rights to a Canadian superannuation fund, who felt that growing almonds (which are heavy water users) would be a good thing to do. (SMH 3/12/19) Hey, the price of almonds is good at present and you cannot smell rotting fish from Canada.

The idea that if you fix the money, everything else will come right seems to permeate every aspect of our neo-liberal, managerial society. I think of it as a religion, that ‘the market knows best and will allocate optimally with the unseen hand’. It also seems that religious folk are more prone to believe this, happier to believe that an unseen force can magically fix things and that it morally worthy to suffer now for some future redemption.

But in politics, we do not even have to debate these things; there is another option, ‘kick the can down the road’. Having the CSIRO produce a report in 2008, ‘Water Availability in the Murray Darling Basin’, led to an inappropriate Murray-Darling Basin Authority report in 2009. The CSIRO’s scientific response in 2011 was ignored. There was a Royal Commission inquiry by Bret Walker which found that the Authority has shown ‘gross negligence’. So they had another ‘Summit’, just last month.

All this is not to mention that Angus Taylor spent $80 million in taxpayer money to buy back water rights from a company called Eastern Australian Agriculture registered in the Cayman Islands and run by an ex-rowing mate, with the deal signed off by Barnaby Joyce. (The Guardian 19/5/19)

It is a worry, when the senior counsel assisting Walker inquiry writes a book called ‘Dead in the Water’ and still comes back with an opinion piece like this.

www.smh.com.au/national/murray-darling-basin-summit-a-laughable-response-to-finding-of-gross-negligence-20210318-p57brq.html