Reflections on Australian politics and policy

I came not knowing much about Australian policy or its political system. That’s partly because it was never really on my radar, but also because it – unduly in my view – seems to receive scant reporting overseas. To be fair I probably still don’t, but it’s been a fairly intensive time here and I’ve been fortunate to meet with politicians past and present as well as senior officials from six of the nine governments here. So, for what they are worth, here are some personal reflections on policy and politics down under…

First, it’s very clearly a new era. Like when you look back at an old photo and suddenly realise your hair cut was out of date even for then, Howard represented a bygone period, and the legacy of his time in office was as much a lack of action as taking the country in some unpleasant directions (like the migrant detention camp in Nauru).There’s now a lot of goodwill and optimism for the future, and strong economic foundations on which to realise progressive goals on health, education, the environment and fairness. On the downside too many issues were pushed into the “too difficult” box for too long and are now long overdue for attention – in particular national infrastructure, social equity, and the natural environment.

Second, the new Prime Minister Kevin Rudd is an interesting and rather unusual leader but ultimately underwhelming. A former public servant, he came into power on the wave of a public desperate to come up for air and look to the future. He has made some good steps forward – on reconciliation with Indigenous Australians, on international engagement, on climate change, on investment in skills and infrastructure. Yet he’s beginning to slip into the territory of endless reviews and initiatives with no clear sense of how they will all land or fit together. Of course this view may be a little premature – he is only one year in – but with a reputation built on technocratic expertise you have to deliver or you’ll fall; and when you do it’ll be fast. Most critically, he lacks a capacity to compelling describe a vision or excite people around that. Change not from, but to.

Third, policy making and public services here are going through a real culture shock after years of relative ease and inaction. There’s much to improve on: a lack of statistics and robust evidence base; weak think-tank and research groups; sloppy policy making processes; an absence of real scrutiny and rigour. In so far as there are articulated ends for public investment there’s still an insufficient account of the means to get there. Blair may have found them late, but the ideas behind market design and user empowerment were fundamentally right. One of the biggest challenges for Rudd will be creating this ‘enabling’ policy infrastructure and capability to drive the outcomes he’s after – and it won’t come quickly or without some heavy lifting.

Fourth, all countries have imperfect governance arrangements and Australia’s is its nine-government federalism. You can obfuscate into the language of vertical fiscal imbalance, or decree that it’s always been that way, but it is broken, doesn’t work for the challenges that Australia faces, and needs to be fixed. The proposed National Partnership Payments won’t solve it, are disingenuous, and will leave the problem to fester for another political generation. I don’t have a perfect solution by any means but a better start would be an honest and principled discussion of where roles and responsibilities should sit and how they might be exchanged.

Fifth, a very positive feature here, and also a good thing about having states, is that policy is made much closer to the community. They are more involved in decisions; policy makers have more regard for the genuine outcomes of policy and not just whether it is theoretically pure and tractable; and politicians devote their time and effort to understanding individual stories and experiences. Just to take one example: there’s much the UK could learn for its next spending review from Queensland’s Toward Q2 work on how to engage, involve and communicate priorities to the public.

Sixth, the policy challenges are unsurprisingly very similar to the UK. Both countries struggle with how to ensure all regions and citizens benefit from a more globalised and knowledge based economy. Both look to prevention, early intervention and personal responsibility to address rising expectations and demands on public services. Both are committed to addressing climate change, and weigh up difficult tradeoffs in how best to transition to a low carbon world. And both the British and Australian public cite quality of life, family and community as the most important things in life yet their politicians jostle to find the appropriate narrative and tools to reach them.

Yet there are also some subtle differences. The most pressing social challenges are here found in extremely remote areas, and this brings with it distinct service delivery challenges not found in the UK. Moreover, Australia’s economy and population are growing much faster than the UK, with consequential upsides and a need to manage changing hotspots like on congestion and infrastructure. Finally, a more balanced and diversified economy than Britain’s, policy makers down under ponder about Australia’s economic future and what balance for risk and reward to target.

But overall I’m left with an impression of optimism and of a country and policy environment that isn’t hostage to a past and has great opportunities to forge new directions. All of which means there’s much to watch in the future…

Reflections on Brisbane...

It’s my last week at work. Soon this blog will be no more, save perhaps for the occasional smattering of smug travel photos over coming weeks. So I thought I’d do a few wrap-up blogs with some reflections on Brisbane, policy and politics down under, and perhaps Australia too.

Starting with Brisbane, I’d definitely recommend paying a visit if you’re ever in Australia. Often passed by, or seen merely as a gateway to the Great Barrier Reef, there’s actually a lot here to see. Australia’s third city, Brisbane started as a penal settlement but its propitious position and claiming of state capital status for the newly founded Queensland (from then inland rival Ipswich) established it as a dominant city. Since the 1970s, and particularly since the 1990s, there has been explosive population growth, with a further 600,000 expected to arrive in the urban region by 2020 (up from the current 1.8 million).

(A peculiar fact about Australia is that there are no mid-size cities between 500,000 and 1 million people. There are 5 large cities – Sydney, Melbourne, Brisbane, Perth and Adelaide – where two-thirds of Australia’s population live and then lots of smaller towns. I can’t think of anywhere in the world with the same urban spread.)

Some of the best things about Brisbane:

• Excellent quality of life: lots of sunshine, relaxed people, close to great coastline and surfing, many interesting day trips around, a year long range of festivals, and strong sense of community and belonging.

• Some world class culture: this seems to have really come on in recent years. The new Gallery of Modern Art (GOMA) has leading exhibitions, so too are the notable Queensland Galley of Art, the State Library, and the South Bank stretch, which architecturally tops London’s South Bank, if falling slightly short on venues.
  
  
• Not too small, not too big: the size of the city means you interact with people from a mix of backgrounds and there’s a compelling sense of shared culture. So when a Picasso exhibit comes to Brisbane (as it did earlier this year) it’s a shared experience for Brisbanites. You don’t get that in the likes of London, Paris or New York.
  
  

Some downsides are that it often seems a bit cliquey (the sort of place where you end up living next door to the cousin of the person in the office you don’t like), and that not being Australia’s biggest city (nor the capital) there’s a natural limit of opportunities. And it doesn’t have the same icons as say Sydney.

Brisbane is ranked the 34th most livable city in the world which I think worthy (five places above London, eight above Barcelona, and fifteen over New York). Mind due Zurich and Geneva do have two of the three top spots so there’s clearly something odd going on with the rankings.

Anyhow, the photos below fulfill my honorary role for the state tourist board…

Territories and democracy inaction

I’ve always been a little confused about the difference between a state and territory (or provinces and territories in Canada). I guess they are mostly quirks of history: with the more powerful regions of countries getting the more autonomous state and province title at point of federation, and the weaker or newly emerging ones being left with some inferior 'territory' status.

For the most part it seems to make little difference. For example, the Northern Territory here in Australia have their own legislative assembly under delegated powers from the Commonwealth. And, although they only get to send two senators to the Commonwealth Parliament (unlike the founding States which get to send twelve each) this is pretty fair in terms of per capita share. They did also get a chance to become a state in 1998 but turned it down (mostly because they didn’t want to give the then Chief Minister more power and platform, but also because existing states determine the conditions you join on and it was perceived they weren’t getting a fair offer).

But in other ways it does create two quite distinct classes of citizen. One notable example is the Northern Territory intervention, where the Federal Government used its legislative powers to bring radical change in welfare, law enforcement and land tenure rights that it couldn’t do in the States.

A second example I discovered today is a peculiar discrimination in voting rights. Australia has a constitution, and it can only be changed by referendum. Since 1977 Northern Territorians (as well as people from the Australian Capital Territory) have been allowed to vote in referendums. But for a bill to pass it must achieve what’s called a ‘double majority’: in other words get a majority of both the national vote, and a majority of the States. (There’s actually a more bizarre ‘triple majority’ rule that can apply, where anything that affects a particular state has to receive a majority in that state).

Because they aren’t states, votes in the two territories only count for the national vote. So if say three states plus the two territories formed a majority to pass a bill, and it won the national vote, it would still fail because it needs four states to say yes. A version of this last happened in a 1984 referendum on terms for senators: it had the popular majority of Australians, plus two states and two territories but was blocked by the other (smaller) states. Indeed, this double majority rule is one reason why only 8 out of 44 referendums have ever been passed along with Australian’s relative conservative tendency to limit the role of government. More to the point it’s a very disingenuous way to have been given voting rights back in ’77 and, if perhaps not a daily bind for residents of the territories, does maintain a unjust second-class of citizenship.

Water markets in the Murray-Darling Basin

The best bit of Per Capita’s ‘market design’ conference proved to be the case studies of public markets in Australia, rather than any gems about market design per se. One of those related to water markets operating in the largest surface water system in Australia, the Murray-Darling Basin. Straddling five jurisdictions, the basin carries water from the Murray and Darling rivers over an area equivalent to the combined size of France, Germany and the UK. Water shortages here are not a new problem by any means but have got much more extreme in recent years with:

• Reduced rainfall: rainfall in the last five years has been around 10% of the historical average;
  


• Changed rainfall patterns: with rain falling in different seasons the traditional autumn rainfall over the Murray-Darling Basin has disproportionably fallen;
  


• Over allocation of water rights: which were based on assumptions of higher trend rainfall and lower levels of land utilisation; and
  


• Higher temperatures: with three of the last five years having broken temperature records there has been increased evaporation.
  

How does the market work?

• A new inter-governmental organisation called the Murray Darling Basin Commission has been established to oversee water use: this brings together six governments (the Commonwealth plus Queensland, New South Wales, Victoria, South Australia and the Australian Capital Territory). Beneath this is a highly complex governance arrangement – each can send three Ministers to the MDBC’s Ministerial Council and a further two as MDBC Commissioners.
  
  
• State-level caps on diversions: which prevent upstream States unfairly diverting water, or building dams to reduce flow. (These first came into existence in the mid 1990s.)
  
  
• Inter-state water trades: the six governments are able to trade water rights using fixed exchange rates determined by the MDBC (or by individual states if transparently reported to the Commission).
  

Where’s it all at?

The market is still in very early development and the region remains in a semi-crisis state. Nonetheless it already appears to be triggering some of the innovation and efficiency adjustments you’d expect. For example, there’s been a recent shift in economic composition in the basin, with an increased value of wine production (a falling quantity effect being more than offset by rising quality). There’s also been a shift in use of water as a factor of production with dairy farmers trading their water rights and importing animal feed rather than growing within the basin region.

Where could the market go next?

As the market evolves it could employ a few further features:

• Leasebacks: where one entity buys the rights and then leases back some of the allocation to the user. This would be a good way to spread risk and reduce transactional economies of scale.


• Covenants: this would permanently transfer the environmental rights. Indeed this is happening in part through a Federal buyback scheme worth $10bn.


• Future and options exchange: this would allow for trade of water (and future water rights) in the same way in which that oil exchanges work. So instead of an ‘exchange rate’ you’d get spot prices. For this to work you’d need a fair degree of depth in the market – both buyers and sellers.

I don’t know enough about environmental economics to fully appraise the emerging market here, nor know if there are better examples elsewhere, but it strikes me as a potential good case study for water rights issues occurring in much more extreme environmental and governance circumstances such as the Nile Delta region.

Learning the wrong lessons from crisis

One of Australia’s leading progressive think tanks, Per Capita, are holding their annual conference in Brisbane this week. It’s on ‘market design’ – in other words when, where and how to use markets to help deliver government services. It comes at a really unfortunate time though as politicians of all colours scramble to find fault with ‘markets’. Take for example Sarkozy’s recent “laissez-faire capitalism is over” speech, or the line No. 10 pushed that Brown long ago warned us that markets fail.

It would help to distinguish between at least three broad types of markets: financial markets which trade risk; goods and service markets which trade products between businesses and to households; and public service markets which provide government funded services but are not necessarily managed by government agencies (and could for example be run for profit).

Even such a simple definition shows how silly the politics has already got. When Sarkozy talks of the end of capitalism he’s beginning to slide into the goods and services territory – and to industry protection and state support policy. Even more bizarrely, the recently-dug-up speech which Brown gave at the SMF in 2003 is very much focused on the use and limits of markets in public services and is not a general theory of markets. (Amusingly it also talks a lot about the problem of state failure replacing market failure, a risk probably rising in significance daily.)

This ‘contagion’ effect is unfortunate: the financial crisis has some very specific and technical causes and shouldn’t lead us to hasty conclusions about the operation of goods and service markets (and junking long established competition policy) nor about public service markets (and putting unnecessary brakes on bringing the benefits of markets into public services when and where they can add value). In so far as there are general lessons about markets to be found from the financial crisis it’s the importance of good information for them to work effectively and of careful ‘agent-design’ (e.g. that the bank knows who the ‘right’ people to lend to are, and there’s no third party ready to benefit from misselling). But we knew all this already and the three broad market types I described each have specific features and come with very detailed theory as well as evidence and practice in how they work.

Perhaps it’s a good example of how societies – and politicians – respond to crises:

• We have to find historical precedence: so the current economic crisis is rivalled only by the Great Depression of the 1930s. (Actually it’s a poor comparison: we remember the Great Depression for the one in three who became unemployed and the almost half pushed below the poverty line, a human consequence that the current problems will have nothing to compare to, and not the fall in stock values.)
  
  
• We must all somehow be affected: perhaps this is some sort of solidarity effect, or maybe that people are perversely jealous of the attention a crisis gets. But it’s amusing that almost everyone is trying to claim relevance to the credit crisis at the moment. I’ve lost count of the number of times I’ve recently heard policy makers say things like “in the current turbulent times [environment/ social/ education/ insert random policy area] is now more important than ever”. Why don’t we just let the macroeconomists have their moment in the limelight and acknowledge that constitutional reform or what’s in the school curriculum isn’t the most pressing issue right now?
  
  
• Something must be done: we have to find the general lessons and apply them in all forms and in all places. So we get an equal and opposite reaction with for example politicians getting lukewarm on markets in public services. This is also a particularly common response following disasters whether natural or man-made with disproportionate reactions like with health and safety measures that represent extremely poor levels of cost-effectiveness.
  
  
• Obfuscation and denial of the root cause: a sensible reaction would be to say something’s gone wrong with (parts of) financial markets therefore we need to (1) stop this from worsening (2) limit the consequences elsewhere (3) reduce the chance of this happening again. We’re close to doing (1) now and attention is beginning to shift to doing (2) and (3) through fiscal measures and regulatory and banking reform. This will expend enough political time and effort without trying to fix all other areas of life with some element of market in. Arguably, even talking about the failure of ‘financial markets’ is far too loose a description – it is only some elements we now have problems with that will require fixing (e.g. subprime mortgages, derivative swaps) and the rest is effect on rather than cause of.
  

Anyhow I’ll be listening closely at the conference to whether (and for how long) each speaker drones on in generalities about the financial crisis and attempts to make convoluted links to other areas. I suspect the politicians will be the worst offenders...

Achieving Culture Change

I gave a talk on ‘culture change’ today to the communities and indigenous policy parts of the Queensland Government. (The supporting slides are below – and are a slight excuse to test out a new Google PowerPoint embedding function).





My argument was in four parts:

• First, that people’s cultural influences really do matter for the choices they take in life – and in turn these are particularly driven by the influence of our family, peers, community, as well as the organisations we spend our time in.
  


• Second, that the attitudes, values and norms we derive from these affect our behaviour in often quite unpredictable ways along with other factors like the legislation, information or rewards we face. So we might have a value of a university education being important because the people around us have reinforced this, but it’s only when we are provided with the information and financial support to actually go that it becomes a ‘behaviour’.
  


• Third, that government policy needs to get more sophisticated at understanding the different influences acting on different people. Sticking with the example, providing simple information about university options may be enough for some but others might not even value it in the first place. In which case policy needs to consider much more about how to promote different courses of action ‘upstream’, for example through thinking about the nature of relationships and relationship support.
  


• Fourth, following this approach seriously has some quite big implications for government: being able to develop the case to target different people with different types of support; using a range of disciplines and approaches to get better insight into how people make decisions (and not just economics); and being ready to invest in securing big change for the long term and not just looking for the quick wins (which the more punitive legislative approaches tend to provide). And all the while treading the ‘elastic band of public opinion’ carefully to avoid crossing the boundary into paternalism and the nanny state.
  

Whether any of this is relevant for communities and indigenous policy here is I think part yes and part no. Yes in that current policy like the Northern Territory intervention applies a very limited set of levers in a very intensive and indiscriminate manner. So it places the entire community under income management whereby an adviser decides how to spend your money (unlike the welfare reform pilots in Queensland which will use income management in a limited and targeted way). My view is that the Northern Territory intervention will only serve to reinforce negative signals about community development and personal responsibility. The culture change work is also relevant because of the broader messages about promoting strong families and positive role models, as well as provision of support and advisory services.

Yet the real missing piece is on the supply-side: namely that most indigenous communities are so remote and so lacking in real jobs that there’s little to practically aspire to. There are jobs in the mines, but these merely replace one form of passivity with another and don’t offer a diverse set of life courses.

To a certain extent it reminded me of a visit to Salford I made in writing the original longer discussion paper. What Salford has been doing quite effectively is integrating their community redevelopment policy with the local economy and businesses (not least helped by the BBC’s move up there) along with adopting some cultural and behavioural support policies. What this could mean in community policy speak would be shifting away from the intense place-based initiatives of the past to integrating policy on community assets and opportunities with policies on skills, capabilities, and with cultural capital and personal and mutual responsibility. All of which returns me to my conclusion from the Aurukun blog: that welfare reform and community development is only going to work once someone’s got a sustainable economic vision for these remote communities - which would let loose a whole virtuous circle of cultures, behaviours, and outcomes.

Income inequality

Interesting paper on income inequality out this week from the boffins at OECD. Particularly worth playing with the data in the graphical package Gapminder.

The main findings include:

• Income inequality rising since the 1980s in all countries along with increased social spending to offset it. This suggests if governments start to ‘let loose’, or fail to target poverty-reducing spending, income inequality will accelerate further.
  
  
• Income inequality rising since 2000 in countries like the US and Germany but falling in the UK and Australia. I tested this out on the historical data plotting poverty against social spending since the 1980s. Each bubble represents a year; I’ve added the green lines to highlight the change in most recent years. Of the four, the US has the highest rates of poverty, then Australia, Germany and the UK. Germany and the UK have traded places with a radical drop in poverty in the UK in recent years and coinciding rise in Germany. The UK’s cut appears to have cost an additional 3 percentage points of GDP on social spending; Germany’s rise has been while social spending has been pretty constant (presumably feedback from the structural and higher unemployment they’ve suffered in recent years).
  
  


• Getting more people in work is – unsurprisingly – found to be one of the major ways to reduce poverty, although capital inequality is now more significant in the past. This must be particularly so for those house buying, share-owning Anglo-Saxon economies.
  
  
• Growth and poverty is a more mixed story. The US and Australia have been growing but with rising inequality in recent years (albeit Australia from a much lower base). The UK has been growing but with sharply falling rates of inequality (albeit still higher than Australia).

Focusing solely on the Australian and UK trends for a second this does go some way to explaining in general terms where the two currently differ in political trends. The UK has cut poverty and inequality but the rising social spending this has cost is probably coming to an end and seems to have - for the present at least - maxed out taxpayers' willingness to spend. Meanwhile, Australia has had a long period of rapid growth, though the public now appear more willing to countenance higher spending on social security and public services to improve equity and fairness. I guess we'll find out what the US electorate think very soon...

End of the week...

Sorry for the gap in blogging this week – product of a mostly wasted week that culminated in a lesson why never to try doing a job interview by teleconference (or equally when in a different time zone).

So finishing up the week here’s a pick and mix of recent themes of the blog:

• Public administration: my work on public service reform and helping set up a new Public Service Commission has come to end. Last task was writing a speech for the new Chair on priorities for the Queensland Public Service. Set in the context of the Premier’s new Q2 targets, it argues the Government will need to build higher performing organisations, get serious about leadership and skills, work more effectively across agencies and continue to build on some good public engagement work. Accompanying slides with my favourite age-grade chart here, and further comment on this in a previous blog.
  
  
• Welfare reform: looks like a big plank of the welfare reform pilots could be in doubt with legal questions being raised whether income management is in breach of the Racial Discrimination Act. While specifically about the ‘intervention’ in the Northern Territories this would no doubt have implications for the welfare reform pilots about to start in northern Queensland (although the Government don’t seem ready to concede as yet).
  
  
• Crocodiles: the croc believed responsible for killing Scot Arthur Booker is off for a breeding programme because it exceeds – by 30cm – the cut off for ‘iconic crocodile’ status. It’s one thing to keep it, but you’d think they could quietly shunt it off to a retirement facility rather than an active breeding programme.
  
  
• Bad policy: legislation in New South Wales ‘accidentally’ allows tobacco sponsorship of racing events following a supposed drafting error. Clearly no accident and a disappointingly mild reaction from Action on Smoking Health (Clive: a cousin of the British group?) who are said to be ‘disturbed’. This comes at the same time as revelations in the UK about Blair’s involvement in the F1 exemption debacle a decade ago.
  
  
• Crap politicians: more evidence of the low bar for Australian politicians – a probe into Andrew Stoner’s comments that Federal MP Alby Schultz’s should be ‘blindfolded and shot at dawn’, and a new Committee being set up to find ways to punish bad behaviour in Parliament. Ultimately, the Australian public don’t seem to sanction such raucous characters at the ballot box which would be the best quality-control measure. Meanwhile in Queensland revelations about Ministerial interests still developing – a not unusual story but surprising no code of conduct exist here to prevent such holdings or set down clear standards about disinvestment procedures.

Aurukun

Despite the Coen Negotiation Table being called off, the opportunity to see first hand an Indigenous community was too much to pass up and I managed to catch a flight to the Aurukun community instead. This is remote Australia with a capital R: high up on the Gulf of Carpentaria it’s a land of airstrips built by the US Army in the Second World War, hundreds of miles of nothing but red dust, and multi-day drives to the nearby towns.

Aurukun is one of the most extremely disadvantaged communities in Queensland. It became well known for bad reasons last year after nine residents were given suspended sentences for the rape of a ten year old girl because the judge thought she “probably agreed to have sex with all of you". There are a little over one thousand people in Aurukun: one hundred of which are (mostly white) government officials, health workers and teachers, and the remainder of which are the local Wik people. The Wik people live inside the town, the officials in mobile homes around the perimeter.

On landing, a police check inspects baggage for illicit alcohol or other drugs. Aurukun is part of the intervention policy that has strict controls on the sale of ‘grog’; the town’s tavern is to shut next month. Sadly there were few positive signs about the community. There are no jobs – the only businesses are the shop and tavern and these are both run by the government. There is employment in these - and in the government office - for locals under a work for welfare scheme known as the CDEP. But it’s a depressing form of employment and seems to often be nothing more than an excuse for both sides (e.g. a woman employed under CDEP in the government office apparently rarely shows up for work and when she did for a couple of hours while I was there she was just put in the corner to play computer solitaire).

There are some jobs in the regional mining companies, but these are a long drive away and mean leaving the town or returning irregularly. Those who do find such work are well paid, but theft of food and petty crime against them and their families is pretty rife.

There’s a palpable sense of aggression in the community. In the 24 hours while I was there one person went on a rampage with a spear and shovel through the town, another threw a strop around the government offices because her welfare payment hadn’t gone into her account. There are regular riots here, with two expected crunch points ahead: in the next month with the welfare reform pilots kicking in and again later in the year when some of the residents now working in the mine receive their first tax bill.

The idea of the welfare reform is to:

• First, to ‘rebuild norms’. A Family Responsibilities Commission has been set up to promote child wellbeing with sanctions to place people under ‘income management’ (i.e. to take control of people’s welfare payments) for breaches in regard to child welfare, school attendance and lawful behaviour.
  
  
• Second, ‘reform incentives’. This is seeking to transfer people off welfare into jobs and provide skills and training. In the future it will be much harder to get onto CDEP, and payments will be reduced in size.
  
  
• Third, ‘normalise housing’. On top of welfare payments, most housing is rented out at low or no cost. In the future the idea is to promote home ownership and increase rental levels to market rates (though I’m not clear what ‘market rates’ means here as there is no market, nor equivalent to base rents from).
  
  
• Fourth, reduce the scope of government. In Aurukun the government sector completely crowds out any potential for private or not-for-profit sector jobs. It makes no sense for the government to own and run all towns like Aurukun and only increases the dependency culture. So the idea is to slowly transition some of these jobs out of government and develop more new ones.
  

At this stage the pilots are only beginning to roll out after a lengthy effort to get the details right with the community. It will be interesting to see how successful they are. To be honest my visit didn’t leave me with much optimism. Aurukun feels completely artificial: aside from the mines there’s no sustainable economy here and it’s difficult to see how it could be stimulated. If Aurukun wasn’t already here, people clearly wouldn’t move here.

Welfare reform will only work if people have a sustainable economy to transition into, or if such an economy can be envisaged and developed, and, sadly, I didn't get the sense that's the case.

Some photos I took below...

More Aurukun photos...

Australia's $10.6bn rescue package

Kevin Rudd this evening addressed the nation to give details of his $10.6bn ‘rescue package’. It is basically a massive fiscal stimulus package:

• $4.8 billion for an immediate down payment on long term pension reform;
  
• $3.9 billion in support payments for low and middle income families;
  
• $1.5 billion investment to help first home buyers buy a home;
  
• $187 million to create 56,000 new training places in 2008-09 (comment: small beer relative to the other items); and
  
• Acceleration of the implementation of the government's three nation building funds (education, health, infrastructure).
  

Benefits will start coming on line from early December with single pensioners receiving a lump sum payment of $1,400, pensioner couples receiving $2,100, and people receiving the carers allowance $1,000 for each eligible person in their care.

The rescue package comes on top of the guarantee over the weekend for 100% of bank deposits and is sourced from the c.$20bn surplus in the recent budget.

A good way to blow $10bn?

If a surplus ever was going to be drawn down now is probably the right time. What’s currently a credit crisis is soon going to become a nasty and lingering business recession here and elsewhere so an early inoculation against the downturn may be a good idea. IMF forecasts for Australia are for an economic slowing, although notably not the zero per cent growth facing many other OECD countries. Australia's well regulated banks also are generally in good shape so the landing is going to softer here than at home and this package may help ensure that's even softer and for worse off groups. $10bn is also not a huge amount of money in the scheme of things (c.1% of GDP) so it could be seen as a sort of insurance policy in uncertain times.

On the other hand there should be a few questions asked:

• Is it the right time to try and target a fiscal package? We’re in the eye of the storm of a credit crunch at the moment. Sure, the ‘real’ effects will land in due course in a business recession but what would be the cost of waiting another week or so to have a better idea of where markets are heading? The key to fiscal packages is ensuring they land at the right time and we'd have a better idea of when that might be in even a few days' time. Of course the timing is more about the politics but they'd be other ways to manage this (e.g. signal the size of the package but announce the timing in the next few weeks).
  
  
• Has there been sufficient time to fully think through? Perhaps they’ve been thinking about this for a long while and there's been some rigorous analysis. But I suspect not: and spending $10bn warrants serious examination to get it right.
  
  
• Is it appropriate targeted? The package is partially targeted but not completely – for example to all pensioners. If Australia’s income distribution is anything like the UK’s this is not a good way to tackle the potential poverty effects that Rudd says it is designed to – pensioners have the highest levels of income variance of any group.
  
  
• Some bad spending items in there. $1.5bn for first time buyers is more good money after bad.

Meanwhile, over in Blighty, Gordon seems to be getting some good headlines e.g. 'Gordon Brown has saved the world's financial system, says economics Nobel Prize winner' from today's Daily Mail as both Europeans and Americans copy elements of the British plan.

Death

I was due to visit a welfare reform project up in the Cape York region this week. It would have been an interesting trip on several counts. The project operates in a (mostly) indigenous town called Coen in the northern tip of Queensland, which being over 2,500km from Brisbane is somewhat off the beaten track (see below).

The so called Welfare Reform Trials have had a lot of attention because they set out strong conditionalities in return for welfare payments (e.g. sending children to school and meeting certain tenancy conditions) and an emphasis on family responsibilities. What I was going along to was the ‘Negotiation Table’ which brings together commonwealth, state and local government officials with local leaders and community organisations to discuss issues facing the indigenous community and specifically this time how the welfare reforms were working.

Unfortunately however one of the elders died this weekend and so the whole thing has been called off. I don’t know much about the community in question nor exactly what the meetings would have been like (and unfortunately now won’t) but it did surprise me a little that it’s been called off - and called off indefinitely as the community is entering a mourning period of up to a month. It’s a clear example of cultural differences – in the UK we’d likely go ahead, perhaps doing a minute’s silence or something similar to mark the passing. But we’d go ahead because we’d weigh it up against the now unavoidable costs of chartered flights for officials from Canberra and Brisbane, months of pre-conference work, and potential risk of disruption to the project. I’m not saying one decision is better than the other, but we’d say that the person would have wanted it that way because they loved the community and wanted to see it continue to strive or something similar.

So I decided to find out a little more about what death means in Aboriginal society. For Aborigines, death represents a return of the spirit to the Dreaming and the eternal life-stream. Upon death the spirit returns to its source to await reincarnation. Death rituals vary between Aboriginal groups but I was struck by a few points, some which I’ve seen in other societies and others not:

• It is forbidden in Aboriginal culture to refer in any way to the deceased. Instead the news is passed on indirectly in forms like “X has become one” (where X is the wife/husband). This was evident in e-mails and phone calls earlier where it was unclear who exactly had died.
  
  
• Ritual mourning and burying rituals have to be fully carried out to assist the spirit into the afterlife; without this the spirit will be caught between death and future life. Again this helps explain why it’s unclear if/ when the conference will now happen – with up to one month of mourning being planned everything else is disrupted.
  
  
• The mourning is supposed to be accompanied by high levels of agitation and (sometimes) self-harm like burning oneself with coals or gashing of the forehead. I’ve see a bit of this Hindu society in Nepal, though it was more agitation through intense wailing than active self harm.
  
  
• Relatives, and particularly widows, have to experience food taboos and isolation from the community for up to one year. This seems a particularly harsh feature, although may not be as customary these days.
  
  
• There are a range of burial approaches from burying under rocks to cremation. I presume these days everybody has to be cremated or buried in an official spot though perhaps not in these more remote areas.
  

Clearly then death in Aboriginal society is an intensely mystical, complex and tabooed ritual. Apparently Aborigines also don’t particularly fear for death which if right is a very positive feature of their culture - compared for example with the Catholic faith with its both rather elaborate rituals and instillation of life-long dread and apprehension of death. The psychology (and sociology) of grief and mouring is an interesting topic. From a purest perspective many of the Aboriginal customs wouldn't seem to help the emotional process of grieving and moving on from the death of a loved one - take for instance not being able to name the dead person or having to live in isolation to mourn. Perhaps though when rituals get deeply rooted in culture then the process of following the rules whether or not they 'make sense' itself helps one to move on because you are just doing what everyone else does.

Subprime explained...

Bit off topic for the blog but in lieu of a regular article here's a highly amusing primer to the subprime market I saw today.

Iconic Queensland

Next year Queensland celebrates its 150th year of independence from New South Wales. As part of the 'Q150' events the Premier today invited nominations for icons that define Queensland’s identify. I’m not sure whether my vote counts but here it is anyway:

People...

• State-shapers: My slightly odd choice would be Kevin Rudd. Not because he’s now PM but because he ran the Queensland public service in the early 90s under the first Labor Government for over twenty years. Before this Queensland really was a banana republic having long been governed by a fascist Liberal government under Joh Bjelke-Peterson (e.g. public protests and street marches were banned in the 1970s and 1980s). So Rudd was an important figure in helping modernise the state (and no doubt will continue to have a role in shaping the state).
  


• Influencing artists: I’m going to go for the author Nick Earls as I’ve got to know him a bit and I think he’s a strong and effective ambassador for Queensland and of those soft influencers in life who often have much the more impact.



• Sports legends: Cathy Freeman. Obvious choice really – her victory in the Sydney Olympics 400m was a massive moment for Australia’s Indigenous population and arguably up there with the greatest sporting moments of all time.

Places…

• Locations: Brisbane's South Bank. It really is a fantastic stretch of well designed architecture – stretching from the Gallery of Modern Art at one end to the Kangaroo Point Cliffs at the other which much in between.



• Natural attractions: Great Barrier Reef. No contender here surely?
  


• Structures and engineering feats: the Kuranda railway in northern Queensland. Seriously impressive railway built by hand (mostly by Irish labour) in the 1880s through the rainforest, originally to serve the mines and now a spectacular scenic railway.

Stories…

• Defining moments: Expo ’88. This renovated large parts of Brisbane, particularly around the river. More to the point it was also a defining moment in that it put Brisbane (and Queensland) out to the world.



• Inventions and innovations: the cervical cancer vaccine developed at the University of Queensland.
  


• Events and festivals: has to be the Ekka.
  


• “Typically Queensland”: tough choice this one. Close contenders were XXXX beer and Queenslander houses. In the end, given that three-quarters of Queenslanders live along the coast I had to go for a beach theme… so invoking fully the laid back and relaxed beach lifestyle of the state the 'Boardie Short' wins this category for me.

The Brisbane outpost in the early 1860s:

The Courier Mail: A Feral Newspaper

I was reminded today of a brilliant quote from 'Yes, Prime Minister' about British newspapers and their readers:

Sir Humphrey: The only way to understand the Press is to remember that they pander to their readers' prejudices.

Jim Hacker: Don't tell me about the Press. I know exactly who reads the papers. The Daily Mirror is read by the people who think they run the country. The Guardian is read by people who think they ought to run the country. The Times is read by the people who actually do run the country. The Daily Mail is read by the wives of the people who run the country. The Financial Times is read by people who own the country. The Morning Star is read by people who think the country ought to be run by another country. The Daily Telegraph is read by the people who think it is.

Sir Humphrey: Prime Minister, what about the people who read The Sun?

Bernard Woolley: Sun readers don't care who runs the country - as long as she's got big tits.

Apart from just being very funny this does point to the remarkable diversity of Britain’s daily newspapers. In Queensland there is unfortunately only one daily newspaper called the Courier Mail. (One can of course get other national newspapers - which aren’t much better - but it’s only the Courier that focuses on the Queensland Government).

Disappointing then that it’s a complete rag. One case in point was a neither funny nor smart article at the weekend. It was supposed to be a satirical account of a bedroom conversation between Premier Anna Bligh and her husband Greg Withers (a senior public servant and Head of the Office for Climate Change). In the print version they had a double page spread with photo-shopped pictures of them in bed. Even if one thought that acceptable coverage for some public figures, it’s really a very crass way to attack the Premier and serves nothing but to undermine and discredit the office. And yes the Courier Mail is owned by Rupert Murdoch’s News Corporation - so it is very much a regular ad hominem attack.

I’m a strong supporter of the Reithian market failure approach to broadcasting and the media. What does this argue?

• That there are various positive externalities to community and society from having breadth and depth in media, such as improved debate and dialogue in society and hence greater ability to hold governments to account and improve the policy making and legislative process.
  
  


• That the value individuals gain from being informed or educated is never fully captured in market prices, and therefore that we tend to get an under-supply of good quality public information.
  
  


• That given there are increasing returns to scale in media, an unregulated market is likely to become dominated by a small number of providers (e.g. Rupert Murdoch) who then have power to exploit market price or can dump low quality products on the market.
  
  


• That there are informational deficiencies in media – e.g. that consumers may be unable to detect better or worse quality without experiencing the full spectrum of choices.

Which points to a couple of things. First, the importance of regulation and management of the media sector to avoid monopoly and market abuse. Second, that consumers are key. If they don’t demand better quality it won’t be supplied. (And unfortunately there isn’t really a culture of intellectual rigour or scrutiny in Queensland to trigger new entry). Third, there’s a strong argument for public support and subsidy. Mind due I'm not sure any of these arguments apply that well to the case of the Courier Mail.

Still, annoying to be stuck with no alternatives...

The worth of charts

People say a picture is worth a thousand words; so too a good chart. Here’s an age-grade profile of the Queensland Public Service using data from the former Office for Public Service Commissioner. It plots the 10,200 public servants working in Queensland’s management roles – from junior level up to the most senior executives.


What is it showing?

• An aged workforce: the average age of managers in the public service is around 50, and the median higher again.
  


• Huge concentration of people in the latter phase of their careers: 75% of all people in management grades are between 45 and 60 years old. 0.9% are under the age of 30.
  


• Some odd skews: for example middle managers are on average older than senior executives.

Cause for concern?

Of course one would need to supplement with other data but there are some potentially worrying things in this. For example:

• Succession planning: if you were running this show you might have genuine cause for concern about where your next cadre of leaders are going to come from. Especially if – like many other public services around the world – you want to increase the scale and scope of leadership roles.
  


• New ideas: okay so you don’t want all your vital services run by teeny boppers but with less than one in a hundred managers aged under 30 you might worry about whether there are enough fresh ideas and challenging of the status quo. Indeed it’s another three grades below the junior management level where the under 30s start appearing in numbers.
  


• What’s happening with entry and exit: the data looks suspiciously uniform almost like there’s a lot of grade creep going on with people moving up based on age profile. And if that’s the case one might being worried about whether there’s sufficient entry and exit going on and if your managers are actually any good (another clue to this is that less than 1 in 20 senior executives are recruited from outside the public service – and I imagine the existing stock much lower still).
  

What should it lead one to investigate?

Further questions to ask, like…

• What exactly do these roles entail and what skills are needed to fill them? I’m always suspicious of the line that public servants uniquely need vast amounts of experience. Many business leaders are in their 30s and early 40s; national leaders often not much older again. Indeed, Queensland’s Treasurer Andrew Fraser is himself a mere 32 years old (it must be an odd experience for him to very rarely if ever meet people of his own generation working in his department).
  


• What is the pitch and proposition to attract new talent? Have agencies thought about, or better still got, policies for succession planning?
  


• Should there be more recruitment from outside the public service and if so how do you get these people? Pay flexibilities? Stronger brand promotion?
  


• What are the barriers to external recruitment and how can you tackle them? Targets? Cultural change?
  


• What are the implications more generally of an ageing workforce? How do you motivate and retain the good ones and exit the poor performers?
  


• How can you effectively talent manage the workforce? Mentoring and staff development? Talent pools?
  

Anyhow like all good charts if poses as many questions as it does answers (although I fear my word count a little short of the 1,000 mark)...

When crocs attack

An unpleasant end for Scot Arthur Brooker who was this week eaten by a giant crocodile in northern Queensland. An Australian resident and Vietnam veteran, Arthur was checking his crab pots while on a caravanning holiday when he disappeared. So far investigators have found his wrist watch, sandals, camcorder as well as some ominously large crocodile slide marks.

(A second sad crocodile story also this week was a seven year old boy who broke into a zoo in Alice Springs and fed over $6,000 worth of rare reptiles to 'Terry' the salt water crocodile.)

Anyhow, it's sparked a debate about whether Queensland should again start culling crocodiles, which it last did in the 1950s. (Which incidentally almost wiped out valuable Barramundi fish stocks due to an explosion in Catfish stocks). According to local MP Bob Katter "nature is completely out of whack... there has to be culling, human beings are dying here".

To Bob it's all quite clear: "The only way I'd like to see that croc is through the tip of the foresight and the shoulders of the rear sight of my rifle... and if there is any doubt as to which crocodile it is, they should shoot every crocodile in that area ... take out the lot."

In a similar vein, Liberal Senator Ian Macdonald intervened with "if human beings are congregating in an area then all crocodiles should be removed".

It's a pity Steve Irwin isn't around to give some perspective any more. It's clearly a very horrendous time for Arthur's family but perhaps some of these gung-ho MPs should reflect that maybe it is humans that are out of whack with nature.

After all humans might take a little more care about where they congregate. Final word courtesy of Terry of Lindfield: "Shooting the crocs seems a bit unfair... why not just feed them the members of the New South Wales Government?"

Implementing Government Priorities

I’m doing a talk today on ‘Implementing Government Priorities’ at Griffith University.

The context is the recent launch of Queensland’s targets and policy ambitions for the future – called 'Toward Q2: Tomorrow’s Queensland'. It’s essentially a set of targets that will go alongside a new performance management approach to drive public services here. It is in many ways quite similar to the UK’s ‘Public Service Agreements’.

I’ve been fairly involved in producing this, and am generally supportive despite having a few quibbles. Anyhow my argumentation today is that:

• Priority setting and performance management can be an effective model to drive public services – both politically and pragmatically
  
  
• But there have been a number of drawbacks with over reliance on the model – e.g. too one size fits all, risks disenfranchising front-line professionals
  
  
• Therefore need to refine how we use it – more devolution, proportionate intervention models, more engagement with citizens in its design and delivery
  
  
• But also we need to drive public services through other approaches – including use of public service information and transparency; user choice and voice; service devolution and autonomy; customer transformation; markets and contestability; and the public value and co-production model. Critically drawing on the most effective lever for each area.
  

This isn’t new stuff as such in the UK but certainly something not on the agenda here as yet.

Final Garnaut Climate Change Review

Final report of the Garnaut Review of Climate Change released today. Warning: it’s well over 600 pages in length but if you want to take it on the content page is here or the introductory chapter here.

Much better is a good one-page summary from crikey here.

I think there's much to be welcomed in the report. Clive Hamilton (author of Affluenza and sustainability activist) has done an excellent analysis of some of contradictions in the report so I won’t do an inferior duplication save to note a couple of the key points of debate.

• Garnaut recommends Australia aim for a 10% reduction on route to a 550ppm trajectory but go into next year’s Copenhagen conference pushing for 450ppm. Hamilton notes this odd - not only to pre-signal your negotiating position but also to expect others to sign up to deeper cuts than you yourself have committed to. In Hamilton’s words, lowering expectations is likely to become self-fulfilling.

• Garnaut argues the 550ppm is the most prudent economic approach for Australia, yet Hamilton notes the modelling itself finds little difference in the long-run between the different targets. For example, the 0.1% in GDP growth between the 450ppm and 550ppm trajectory would result in only having to wait another two years to double GDP (2042 to 2040). Essentially, Hamilton argues that the politics (and business lobbies) got in the way of the science. Always a difficult tradeoff in 'independent reviews'.

Paid family leave

On the back of a report from Australia’s Productivity Commission it looks like paid maternity leave may soon be on its way down under. If that sounds odd, it’s because it is – Australia and the United States are the only two OECD countries who don’t have state funded maternity leave (see chart below). So although some people are covered through their workplace, a sizable 51 per cent of employers don’t have any provisions for their employees. (One might note this isn't an entirely fair comparison though, for Australia have been paying a baby bonus of $5,000 for several years).

The PM today said he was prepared to ‘bite the bullet’ and accept the principle of maternity leave (though fudging the precise parameters).

What does the report actually say?

• It recommends paid 'parental leave' of 18 weeks, shared by either parent who is deemed the primary carer. This would be quite a progressive and welcome measure, for most countries provide maternity leave which clearly reinforces a gender bias and takes no account of modern family dynamics. However, either the media have failed to read the actual report (perhaps understandably given it's another gruellingly long 300+ pager) – or have failed to pick up the difference in what the PM is saying – for he has cannily and subtly said he’ll accept the report but switches into the language of ‘maternity’ rather than ‘parental’ leave.
  


• It recommends making all family types eligible, including same sex couples. Again to be welcomed, although may well get challenged by a number of the Opposition and fringes of the Labor party in the legislative phase.
  


• Suggests paying a rate equal to the minimum wage of $540 per week. This seems rather stingy compared to most European countries (who pay a rate based on a proportion of pre-birth income), but there are some decent arguments advanced for the flat rate e.g. that it’s more equitable, and many higher income families will have privately negotiated family leave benefits. It also means the scheme can be introduced at a relatively low cost to the taxpayer – establishing the principle which could be scaled in future.
  


• Estimates it’ll cost $530m per year – $450m picked up by the taxpayer and $75m by employers. Indeed, all that employers are being asked to pick up are employees' superannuation (pensions contribution), though business groups are still calling it an ‘excessive and unnecessary burden’.
  

Buried on page 248, the Commission rejected an interesting rival proposal from economist Joshua Gans for a 'return to work' credit – providing tax benefits to employers tied to family leave schemes. This would theoretically be more attractive because it incentivises effective return to work and also because the more income-based reward would encourage more men to take parental leave – but was ultimately rejected because of potential deadweight costs and uncapped cost exposure. A shame because they'll no doubt be a lot of deadweight in the preferred version and it's not as though costs would be that exposed. After the birth rate is pretty predictable and it's unlikely that many would go to the lengths of having a baby and manipulating income records solely to extract a few extra hundred dollars from the Government...