Elisabeth Needs To School Gina

Aug 24, 2012

It’s only in the strange world we live in, where the “free market” isn’t roundly derided as a failure, that a speech by a media executive calling for the world to “reject the idea that money is the only effective measure of all things” makes you sit up and take notice. Particularly when that executive’s last name is Murdoch. Not Rupert. Elisabeth.

Last night, Elisabeth gave the MacTaggart address at the MediaGuardian Edinburgh International Television Festival. I can’t say what this means long term, whether the 44-year old executive who runs News Corp’s Shine Television used the speech to embark on a long campaign that takes on the very world view espoused by the Rupe and Elisabeth’s younger brother James, both of whom have been at the center of the hacking scandals, not to mention paragons of the global media industry.

But, she did make a splash, per the Sydney Morning Herald:

In marked contrast to the dry economic rhetoric preferred by both her father and brother, she said that people needed to “reject the idea that money is the only effective measure of all things or that the free market is the only sorting mechanism” and said that “the absence of purpose” could be “one of the most dangerous own goals for capitalism and for freedom”.


But she repeatedly gestured towards liberal values with references to progressive political figures, including “one of my heroes” Vaclav Havel and Nelson Mandela whom she watched walk from prison “through my tears”.

I can’t help but note the vast difference between the views of Elisabeth, at least as stated in this one speech, versus those of Gina Reinhart. While Elisabeth seems to want to open up new voices and encourage democracy, Gina is trying to sell off one-third of her stake in Fairfax—a move which has further depressed the stock— because she was unsuccessful, so far, at using her wealth to muzzle people.


Keeping Our Eye On The Boom

Aug 24, 2012

Deep in the weeds of the 24-hour dust-up over whether the mining boom is over—on the very day that BHP reported a $15 billion profit— lurks a more obvious strategy on the part of the mining companies: a determination to build up the specter of a threat to the boom if “costs” are not controlled—“costs” being workers’ wages—and to take absolutely no responsibility for the blow-back from the boom.

Some of this is subtle, some not so subtle. The boom is far from bust, as Paul Cleary pointed out in The Australian:

The projects that mining companies have put on hold are completely overshadowed by the $260 billion in investment already approved by company boards and government authorities that is being poured into mammoth mining and energy projects across the country.


Even if commodity prices fall by 50 per cent, these increased volumes will generate increased flows of income into Australia, keeping the dollar strong while driving far-reaching structural change in our economy. This means the mining boom can be expected to deliver benefits and challenges for all Australians for some time to come. [emphasis added]

The mining barons, themselves, swore up and down yesterday that, no, the boom wasn’t over. But, the Fin gives a little insight into where they are going:

At The Australian Financial Review and Macquarie Future Forum in Perth, resources chiefs were confident that Chinese demand for commodities will grow in the longer term, despite a slowdown that has seen iron ore and coking coal prices fall to four-year lows.

However, they warned Australia had become a high-cost place to develop projects, and needed to improve its international competitiveness through reforms to taxation, industrial relations and environmental approvals. [emphasis added]

Aha. “Reforms” in taxation and industrial relations are code words for the Coalition’s agenda: repeal the resources tax and attack the system of bargaining that protects wages and benefits that makes Australia a decent society. In a decent society, leaders would embrace a once-in-a-lifetime mining boom to invest some of the profits in infrastructure, schools and other in life-changing, society-altering projects. Nope, the mining barons make clear, we’re just not in to that.

Note that “high cost” never refers to the compensation of the CEOs of the mining companies, or the staggering wealth of the owners of the companies like Gina Reinhart, the richest woman in the world. “High cost” translates into “take it out of the hide of society and the working person”.

The mining barons view can be summed up thus:

We don’t care how many people are hurt by the rising Australian dollar. That’s the “free market”.

We will fight tooth and nail against resources taxes because, well, the “free market” cannot be messed with.

We truly don’t care  what Australia looks like in 20, 30 or 40 years.


Workers Care About Kids At Risk

Aug 23, 2012

Earlier today, we were musing about the danger of society not taking care of its seniors. And we pointed out that the measure of a decent society is how it treats and cares for its children and its elderly. And, sure enough, workers in Kings Cross walked off the job today because of a threat by the state government to cripple the ability to help adolescent kids.

Here is what happened, per The Australian:

The Public Services Association (PSA) says the Department of Community Services is currently reviewing funding of the Kings Cross Adolescent Unit, which has been operating since 1986.

“We’ve got a government trying to clean up Kings Cross but they can’t give a guarantee that this unit, which does that work, will be kept open,” said PSA assistant-secretary Steve Turner.

The union and other Sydney-based caseworkers held an emergency meeting on Thursday after details emerged that case work levels were being reviewed across the state.

Staff from the Kings Cross Adolescent Unit then voted to stop for the rest of the day, after the government refused to guarantee the future of the unit.

Turner has more to say in his own comments distributed publicly:

The Kings Cross Adolescent Unit is on the frontline of locating and removing children and young people from some of the most dangerous streets in Sydney. These dedicated, hard-working professionals divert at risk youth away from living on the streets, helping them access support services and get their lives back on track.

For more than 25 years, the team has reached out to tens of thousands of street kids and built a strong presence and invaluable relationships in the community.

The closure of the Kings Cross Adolescent Unit would be a sign that the Government has given up on the serious issue of youth at risk or involved in drugs or prostitution at the Cross.

If the government doesn’t want to stand up for kids, looks like it’s left to the PSA to take it on. Good on the union.


Would You Ask Your Grandmother To Live On $35 A Day?

Aug 23, 2012

Ponder this question: would you ask your grandmother to live on $35 a day? And would you think you could live on $35 a day? The obvious answer is no. But, believe it or not, that’s what the country is asking from seniors living on the Newstart program.

COTA, the national organisation representing the rights, needs and interests of older Australians, has an alarming alert out that should make us all sit up and take notice. In COTA’s submission to the Senate, Chief Executive, Ian Yates, warns more older Australians will be sinking into poverty:

The Newstart payments of just $35 a day is the same as 20 years ago. In 2012, this is not enough to survive. Most people over 50 who are on an income support payment are on Newstart, and they make up more than 25% of all people on Newstart. The chance of staying on Newstart allowance for longer periods also increases with age, with 28% of the long-term unemployed aged over 55.  As such, the low allowance unfairly discriminates against older Australians who find themselves unemployed later in life – often due to age discrimination.

It is often said that the measure of a decent society is how it treats and cares for its children and its elderly. The test is before us.


Don’t You Feel Like A Failure When You Earn $15 Billion?

Aug 23, 2012

When is a $15 billion profit not enough? I suppose when you are at the helm of BHP and do not want to pay a fair share in taxes in return for digging up the minerals that are making you rich.

It’s not, as the Sydney Morning Herald tells us, a day to cry at BHP:

The group is still highly profitable. Underlying earnings before interest and tax fell 14.8 per cent to $US27.2 billion, but that was still a very [sic] 39 per cent share of revenue, and BHP’s underlying return on capital invested was 23 per cent.

I’m assuming the missing words in the sentence above were “big haul” or “monster profit” or something. It is not something to wring ones hands over, as CFMEU National President Tony Maher points out. That profit is still the second-biggest corporate profit ever recorded in Australia and more than double the highest profit made in our next most profitable sector – banking. Maher continues:

Don’t be fooled. This is a massive profit, greater than the GDP of over 60 countries. BHP shouldn’t have to be dragged kicking and screaming to do the right thing by its workforce, by mining communities and by downstream Australian businesses trying to benefit from the mining boom.

The worry should be that BHP will use a lower, but massive profit, to try to squeeze workers and continue to fight a reasonable resources tax. Maher also points out, though, that any higher costs are not about workers’ wages:

Where mining companies are looking to cut costs, the protracted record-high level of the dollar is to blame. Australia’s mining boom is going to continue for many years into the future. For the sake of jobs across the whole Australian economy – it’s time for some serious action to take the heat out of the dollar.


Austerity Makes You Sick

Aug 22, 2012

Austerity is a bad thing. As I’ve pointed out before, when an economy is suffering from lower demand, the last thing you want to do is squeeze the pocketbooks of the very people who you want to have out there spending money. But, here’s another thing: it makes you sick. Literally.

So, say a group of doctors who have looked at the madness of austerity sweeping through Europe. The doctors— Martin McKee, Marina Karanikolos, Paul Belcher and David Stuckler—found that:

However, austerity has been not only an economic failure, but also a health failure, with increasing numbers of suicides and, where cuts in health budgets are being imposed, increasing numbers of people being unable to access care. Yet their stories remain largely untold. Here, we argue that there is an alternative to austerity, but that ideology is triumphing over evidence.


For many months, the political and financial aspects of the crisis have filled the headlines. However, behind those headlines, there are many individual human stories that remain untold. They include people with chronic diseases unable to access life sustaining medicines, persons with rare diseases who are losing income support and forced to care for themselves, and those whose hopes of a better life in the future have been dashed see no alternative but to commit suicide. So far, the discussion has been limited to finance ministers and their counterparts in the international financial institutions. Health ministers have failed to get a seat at the table. As a consequence, the impact on the health and well-being of ordinary people was barely considered until they made their feelings clear at the ballot box.

I would add a more specific observation not touched on by the doctors, with the caveat that I could only play a doctor on television. The depression people feel has to be about the feeling that, hey, “I had nothing to do with this crisis, it was brought on by greedy bankers but you are blaming me for it and making me pay the costs”. There has to be an element of anger, frustration and despair.

This is all relevant to what we see happening in Australia. True, austerity is not the order of the day. But, when The Coalition and its business allies are, every day, telling people productivity isn’t high enough and its the fault of workers — even though the productivity crisis is a myth—and, when those same forces, The Coalition and its business allies, attack relentlessly the Fair Work framework — even though that Fair Work framework has benefited people throughout the country— it is not a big leap forward to a society where the health of our work workers declines because of the stress they feel at work.

Remember, forty percent of Australians are shackled with insecure work. That makes for a landscape that will hurt people—not just in their bank accounts but in their physical well-being.


Child protection facing disaster

Aug 21, 2012

The following piece appeared in the Illawarra Mercury:

Child protection facing disaster

The recent tragedy involving a child known to Community Services in Wollongong has highlighted the serious consequences of having inadequate staff numbers to protect children at risk in NSW.Child protection caseworkers at the Wollongong office took action last week because protracted understaffing and ongoing job cuts are leaving vulnerable children in danger of abuse and harm.Despite an initial denial that it records vacancy rates, the Department of Community Services has now admitted the Wollongong office is suffering a vacancy rate of 22per cent.

Elsewhere in the state, our members report vacancy rates are as high as 40per cent – more than double the vacancy rate identified as inadequate by the Auditor-General in 2010.

Inadequate resources and a high vacancy rate means they simply cannot respond to many children assessed as being most at risk of harm and abuse.

It is a point lost on the Minister for Family and Community Services, Pru Goward.

She continues to deny any link between child protection caseworker numbers and the recent preventable tragedy.

It’s true, there’s rarely one single reason behind a tragedy.

Aircraft mechanics subscribe to the ‘‘swiss cheese’’ theory of risk management. That’s the idea that one error is unlikely to bring a plane down, but when a few of them line up – like holes in swiss cheese – disaster can strike.

We can apply the same theory to child protection. Unfortunately, every child in our community is not cared for in a stable, loving family.

For these vulnerable children, we have a child protection system. But when that system is full of holes, sometimes the holes are going to line up.

Caseworkers across the state are fed up with taking the blame for a system stretched to the limit.

They should not be left out to dry for the failures of chronic understaffing, too many kids being allocated per staff member, a computer system that’s outdated and inadequate and being bogged down in paperwork.

In the Child Deaths 2010 Annual Report, Ms Goward made a commitment to “increasing recruitment to achieve a full complement of casework staff by early 2012”. The reality has fallen well short.

Since coming to office, the state government has cut more than 200 jobs from community services and only recently lifted a seven-month freeze on caseworker recruitment. Chronic understaffing means as few as one in 10 children known to be at risk are receiving face-to-face visits from caseworkers in NSW.

It’s simply not good enough.

Ensuring Community Services is properly resourced, staffed and funded to provide the best-quality care and support to vulnerable families and children is a key responsibility of the government.

On becoming Minister for Family and Community Services, Ms Goward promised the government would ‘‘cut the red tape’’ so workers could spend more time face to face with at-risk children and their families, rather than filling in paperwork.

Sixteen months on, high vacancy rates and a lack of resources are placing some of the most disadvantaged families and communities at risk.

The ongoing care and protection of the state’s at-risk children should be a top priority.

It should be properly resourced and it’s wholly the government and minister’s responsibility.

Steve Turner is the assistant secretary of the Public Service Association of NSW.

The Productivity Myth

Aug 20, 2012

Over the past few weeks, I’ve pointed out how often we have to try to challenge rhetorical nonsense about the economy that spills from the mouths of The Coalition and their business allies. Blinding rhetoric, too often, substitutes for truths about the economy. And one of the particular myths we hear, time and again, is the idea that workers are not productive “enough”. It’s not true.

Ian Verrender had a terrific column over the weekend that should not be missed. Titled “Lies, damned lines and productivity”, Verrender leads right off with a quote about the power of propaganda from Joseph Goebbels and, then, hits the issue:

For the past few years, we’ve been bombarded by a constant theme from the business lobby groups: Australian productivity is slipping and unless we have a more flexible labour market and governments reduce regulation, we’ll all be ruined.

There’s a sliver of truth to the argument. Productivity indeed has plunged. And labour productivity has slipped in recent years. But the real culprit in the great Australian productivity decline is capital, not labour. It is our managers who have let us down, rather than our workforce. And in any case, all the statistics have been thrown completely out of whack by the massive investment boom in our resources sector. [emphasis added]

That sentence bears repetition and should be branded on the chests of every politician or CEO who regurgitates productivity myths: But the real culprit in the great Australian productivity decline is capital, not labour. It is our managers who have let us down, rather than our workforce.
Verrender, then, goes on to explain what productivity actually means, coming to another golden nugget:

What is often ignored in this heated debate is that, outside of work hours, labour usually is referred to as consumers. Your workers are also your customers.

Reduce their income and eliminate their job security and you may well end up selling less product. On the other side of the ledger, productivity is also likely to suffer. Let’s face it, cutting wages and conditions is hardly an incentive to work harder.

This is a point that I have made in connection with the cries for austerity around the world: people are dead broke, or so stressed out over their future employment that they don’t want to buy. The problem is not government deficits or debt, another myth that has grabbed hold of brains of political leaders all across the planet. It’s that the Great Financial Crisis, and the years of greed on the part of bankers and other financial mandarins leading up to the Crisis, triggered a sharp fall-off in consumption. Leveraged to the hilt and with dwindling incomes, people pulled back—and stopped buying stuff.
Verrender’s point is right on the mark: if you hammer workers by cutting wages in some blind, and misguided, pursuit of higher productivity, you end up hurting the economy—and society as a whole.
Verrender, then, moves to the obvious culprit in any productivity debate:

Capital productivity on the other hand, has turned negative, wiping $43 billion from national income. Why? Well, a couple of reasons. One is that much of the enormous recent investment in new machines and building new mines has yet to generate an income. And so as that new plant and equipment starts churning out exports, a great deal of our productivity ”problem” – both for labour and capital – will be solved.But the report also highlights what must be an uncomfortable truth for Australian managers, particularly in our resources sector. It reckons a large portion of the cost increases in our mining sector is down to poor management. With a resources boom of unprecedented proportions, the scale and magnitude of the projects under construction has stretched management capabilities, many of whom have little experience with these mega projects. [emphasis added]

The workers are not to blame? Huh. Fancy that.Which of course leads to the obvious conclusion:

Our productivity ”problem” will best be solved through investment – in new and more efficient machines and in education to produce more skilled workers and better managers – not with a slash-and-burn approach to wages and conditions. That’s something you’re unlikely to hear in the coming propaganda war. [emphasis added]

It would be nice if we could have a realistic debate about productivity. Any takers?


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