Personal Reflections

Sunday, April 26, 2015

Sunday Essay - reflections on the sacking of Carol Mills

The sacking Tuesday of the Department of Parliamentary Services' secretary Carol Mills brings an extraordinary saga to an end. You will get a feel for it from this Canberra Times piece by Noel Towel: Department of Parliamentary Services secretary Carol Mills sacked. It has all the elements of a political and bureaucratic soap opera played out against a backdrop set in part by Ms Mills possible appointment as clerk of Britain's House of Commons.

This earlier piece by emeritus professor Richard Mulgan looks at some of the managerial aspects. I quote in part:
Parliaments worldwide are experiencing tensions between, on the one hand, the clerks and their professional staff, who are imbued with the values of parliament itself, and, on the other hand, the managers who have been brought in to impose greater efficiency and effectiveness on what have become large and often unwieldy organisations. As in many other similar institutions that have been subjected to managerial reforms – such as hospitals, universities, museums and law courts – the professionals resent the managers, who have little feel for the overriding mission, while the managers despise the professionals, who cannot appreciate value for money. 
The conflict is inevitable and cannot be resolved, only managed with mutual understanding and goodwill. Again, the premium is on good interpersonal relations and trust. When these break down, as they appear to have done on Capital Hill, everyone loses.
There are three main departments in the Commonwealth Parliamentary system. Two serve the House of Representatives and the Senate, the third (Carol Mills' department) looks after all the things required to keep the Australian Parliament functioning as a whole.

All three were very small, but the responsibilities of the Department of Parliamentary Services in particular have exploded over recent decades. It's not that the number of members of parliament has grown, just that the total institutional size (buildings, services, security etc) has grown very rapidly. The number of security personnel alone would now exceed the total staff of all departments in 1980. It's become big business.

From an operational viewpoint, the efficiency of the Department of Parliamentary Services is paramount. From a constitutional and political viewpoint, it is the departments servicing the two houses that are really important. You only have to look at the role played by Harry Evans as Clerk of the Senate to see this.

The action of the current Clerk of the Senate, Dr Rosemary Laing, in emailing retiring House of Commons Commons Clerk Sir Robert Rogers trying to derail Carol Mills' appointment was extraordinary, her language more so. But they also  revealed the breakdown in trust and communications that had occurred. Initially, Dr Laing was reprimanded. But by the end, Carol Mills had senators of all persuasions effectively baying for her blood.

My first reaction in reflecting on all this was that the Department of Parliamentary Services should be taken out of the remit of Parliament and made an ordinary department of state. Then I thought that this would just give the Executive more power. Perhaps the answer lies in just taking out certain of the facilities management functions, allowing the Parliamentary departments to focus on their key roles.

Whatever the answer, we need the Parliamentary departments to be imbued, as Professor Mulgan says, with the values of Parliament itself.  


Saturday, April 25, 2015

Musings on ANZAC Day

Today marks the 100th anniversary of the Gallipoli Landings. I had a great uncle who went ashore that first day as a stretcher bearer.

His religious views did not allow him to take life, but he felt he must do his bit. William Drummond survived, repatriated to Australia to recover. This photo from September 1916 shows him convalescing.

Harry Gissing, a medic whose diaries have featured prominently in Australian press coverage, was (I think) a friend of Uncle Will's. I'm not sure; I'm working from distant memories.

Gallipoli and ANZAC Day have become very complicated.

Our blogging friend Noric Dilanchian has been campaigning for recognition of the Armenian genocide. The Gallipoli landing coincides with certain critical dates, providing a platform. for e a world wide campaign.

I remember when I first heard about this. It must have been in the 1970s. On the way back from Thredbo, Uncle Jim called in at Queanbeyan. He gave me a lecture on the topic. I'm still not sure why, but I learned a fair bit.

This  is a photo of Great Uncle Morris. He enlisted later and was killed in France in 1917.So of the three brother, two served, one died. My grandfather would have done too, but he was very deaf and as the younger brother someone needed to stay home to look after their sister.

I think that these things are best dealt with as personal experiences.

Last year, Anna and I visited the war memorial at Dangarsleigh near Armidale.  Later, there was a story on ABC New England North West on the memorial..I shared it on Facebook and received this comment from JCW.
We always found that memorial immesurably moving, especially because it was so unexpected. And from the latest unpleasantness in Afghanistan, there is yet another TAS boy on the honour board. I didn't teach him, but I knew him well. He is one of three. My darling friend and director Aarne Neeme lost his son in law, and the man who installed our security system lost his son. The One Day of the Year is an immesurably moving play. I am so grateful to have been part of Canberra Rep's amazing production of it. My elder son trained, but thank God, never had to go. Peter had 2 tours in East Timor, and they were some of the loneliest and scary days of my life.
I don't think JCW will mind me sharing that message.

I'm not going to any of the ANZAC day commemorations. It's too complicated. I am treating ANZAC Day as personal time.

Wednesday, April 22, 2015

That Australian life - NSW storms with a dash of sea level history

The big storm that battered the NSW coastal strip from the Mid North Coast to the Illawarra appears to be coming to an end. The worst effects were concentrated in the Hunter Valley where five people died.

This photo by Dallas Kilponen from the Sydney Morning Herald shows the waves hitting Wylies Baths (the baths themselves are under water) at the Sydney beach side suburb of Coogee.
The waves were quite something. On Tuesday, a monster wave with a maximum height of 14.9 metres was recorded at 3pm, eclipsing the previous high of 14.1 metres set during the 2007 east coast low that washed the Pasha Bulker commodity carrier ashore near Newcastle. I wrote a post on that east coast low (New England's Wild Weather), in part because it came after drought, in part because of its scale. If you click on the link, you will see a photo of the Pasha Bulker that gives you an idea of then wave scale.

In an earlier post (New England prehistory: creating synthesis in the face of destruction), I mentioned that my present historical research was focused on prehistoric New England. My best guess is that the Aborigines came to Northern NSW between 30,000 and 40,000 years ago, although the earliest radio carbon dates are c20,000 years ago. As part of the process, I have been trying to map dates against changing sea levels and climatic variations.

Let me give you a number here just to attract your attention. Over the last 100,000 years, sea levels have fluctuated from perhaps 120 metres below current levels to a metre above.I was thinking of this as I listened to the storm reports. This variation was most pronounced over the last twenty thousand years.

I don't want to get into the now almost theological debate on human induced climate change. However, I am interested in sea level trends. During the Holocene Warm Maximum period that began c9,000 years ago, average temperatures were around half a degree hotter than they are now, the sea was a metre higher than now. That warm maximum period was replaced by a colder phase that saw sea levels fall.

We may or may not have entered a warmer phase now. Its interesting, however, to realise the scale of natural changes regardless of cause.   

Postscript

kvd, I mentioned John Mulvaney in a comment. This video may be of interest. Professor Mulvaney was mentor to Isabel McBryde who I think of as my personal mentor or role model in some of these areas:

Tuesday, April 21, 2015

Musings on a burst hot water bottle

It's still quite early in a cool and wet Sydney. Lacking a warm body to snuggle against, last night, I filled a hot water bottle, wrapped it in a towel, and put it in the bed so that it would be warm when I got in. I had a book and was just going to settle in to read, listening to the wind and rain. Getting into bed a few minutes later, I found it hot and wet. It appeared that the old hot water bottle had given up the ghost, releasing its total contents in a flood.

Now my first reaction was sheer annoyance. So much for my plans. Getting out towels, I started to clean the mess up feeling very annoyed. Then I thought. If I had jumped straight into bed, I could have been badly scalded. So I should feel grateful.

At first I didn't. It is hard to feel grateful when you are mopping up moisture over a bed that was your sleep destination.  Finally realizing that I and that bed could not cohabit that night, I left for the spare bedroom. Snuggling down, finally warm and listening to the wind and rain, I thought that I was lucky to actually have a spare bedroom. Then I felt grateful.  

Saturday, April 18, 2015

Saturday Morning Musings - the importance (and difficulty) of simple questions

Note to readers

For practical reasons, I am treating this post as the Monday Forum post. I want to be able to respond to discussion.

In an earlier post, Economics, public policy and the importance of the small, I referred to the New Zealand model. At the time, I wrote: "Two weeks ago, I was at a meeting. Listening to the discussion, I suddenly said that if we are going to apply the New Zealand model, we needed to be clear on its implications. Nobody had mentioned New Zealand, but most people knew what I meant."

I have since discovered that I was wrong. Most people did not know. Too much time had passed for it to remain in living memory. The head nods meant that I hear you, not that I understand or agree. This lead me to dust off an earlier 2006 post, Changes in Public Administration - the New Zealand Model.

In the eight years since I wrote that post, many things have changed. Even then, knowledge of the New Zealand model was drifting into history. The difficulty is that concepts and constructs survive as current objects that affect thinking.and hence action. This need not matter if those concepts and constructs have been reworked, re-integrated, refreshed to form a new whole.I'm not sure that that's the case here.

 Something similar arises with economic models. By their nature, these models are simplifications of the real world. Their results depend critically on the assumptions used. Sometimes those assumptions become beliefs, carried forward regardless. In this context, Leon Berkelmans had an interesting easy to read short piece in the Lowry blog, Is capital globally mobile?.

Berkelman points out that the Australian Treasury frequently makes the assumption of perfect international capital mobility. This means there is only one worldwide after-tax (risk-adjusted) rate of return on capital. If there were anywhere that offered a better deal, perfect capital mobility would imply that capital would flow into that area, until the return differential was arbitraged away. Similarly, if anywhere offered a worse deal, capital would flow out until, again, returns were equalised.

In fact, there is a very tight correlation over time between domestic savings and investment, something that appears to contradict the assumption of perfect international capital mobility. If capital were perfectly mobile internationally, you would expect much greater variation in the difference between domestic savings and investment.

This may sound very dry, but it is important because key parts of tax modelling and the policy conclusions drawn from it in areas such as the effect of dividend imputation or changes to company tax rates depend crucially on the international capital mobility assumption. To use an example from our little blogging village, some of the conclusions and prescriptions contained in Winton's recent posts are based on the modelling done using the international capital mobility assumption. Over to you Winton!

More broadly, in some of the discussions including those that triggered my comments on the New Zealand model, I try to apply what I think of as the Bob Gregory principle. At seminar after seminar, I saw Bob ask very simple basic questions intended to test and clarify the underlying assumptions and arguments. Bob was not trying to attack, just intellectually curious and seeking to understand. Time after time, I saw intellectual edifices teeter and sometimes fall under this gentle questioning.

Bob's a fair bit brighter than I am. I find the Gregory approach difficult to follow. Sometimes its not just appropriate because things are set in stone. You can't challenge, only modify at the margin. At other times, it can be very hard to articulate the simple questions that will test because the whole edifice seems cloudy, disconnected. Still, I do try, and sometimes (just sometimes), I get a result. Then I smile.        
 


Friday, April 17, 2015

The future of iron ore prices

Today's short post picks up one of the stories around at the present time.

On Macro Business,  Houses and Holes' reports on the latest iron ore report From Goldman Sachs: Goldman destroys iron ore, RIO forecast.

This graphic shows the Goldman Sachs' forecast, back to the 1983-2004 average. It also shows the sheer scale of the iron ore price boom.

Will iron ore prices go back to the long term average price? Probably not, although it may be a lot lower than the peak.

This is my forecast for what it's worth. The big three are ramping up production. That will, as GS suggests, drive many of the midsize producers out of the market. As prices stabilise, the big producers will stabilise production. They will then reduce production to around the point at which the rising per unit costs flowing from  reduced volume equals the rise in price. Beyond that point, profits fall.

Of course, it won't be as exact as that. If prices really skyrocket, they will expand production to damp price increases and to stop others entering the market place.If they get it really wrong, we will have another boom. .      

Thursday, April 16, 2015

New England prehistory: creating synthesis in the face of destruction

Seelands 65 or 66_thumb[4]

This is a photo of Belshaw asleep on the job. It's taken a long time ago. I still have hair! It's taken during a break on one of the digs at the Seelands rock shelter near the Clarence River.

Trying to get back on track with my history of New England, I have focused over the last two weeks on the first chapter in the Aboriginal section, Prehistoric New England. This focuses primarily on the archaeological material. The next chapter, New England on the Dawn of Invasion, focuses on the ethnohistorical material backed by the archaeological analysis. I am probably quite close to being an expert now. Certainly I have enough material to tell a coherent story that you won’t have heard before. But I am also sad.

Go back to the explosion of interest in Aboriginal history and culture during the 1960s. It was an exciting time. Then, somehow, things seemed to collapse. I actually have to research and write this properly, for it’s part of my story. But let me give it to you as it seems now, raw, unvarnished and unbalanced.

Start with Aboriginal languages. In 1967, there were still original speakers of many New England languages, many old. A conference held at the height of the enthusiasm concluded that we must record this material  before it is too late. Then nothing happened. By the time interest resurfaced, much had been lost.

Now go to archaeology. The last synthesis of New England prehistory was published in, I think, 1974. Today outside digs and survey missions associated with development proposals, there appear to be fewer people working on the archaeology of Northern New South Wales, or indeed Australia in general, than there were in the 1960s or early 1970s.

What went wrong? I think, I stand to be corrected, that the whole area got hijacked. In the 1970s, the fashion became black-white contact history. You simply couldn’t get money nor was their interest in documenting Aboriginal languages as compared to other topics.

In archaeology, the focus was dominated by Aboriginal self-determination and heritage protection. It became harder and harder to undertake archaeological work. So from the viewpoint of archaeologists and their students, why bother when it was just so much easier (and rewarding) to dig in Greece or Egypt?  At the same time in Northern NSW, the sea change urban phenomenon was happening, wiping sites out. Yes. there was increased protection, but it was too lagged and too late.

The losers in all this? The Aboriginal people. Yes, it’s partly their own fault. Their obsession with self-determination and with the preservation of uncertain perceived cultural values blocked work that would have given them the story of their past that they really wanted. But it still makes me sad.

I know that Aboriginal people want to know about their past, I can tell them part of the story. But sadly, both the Aboriginal and non-Aboriginal communities  have blown the chance to extend the story in the way that seemed possible in the 1960s and 1970s.

Switching from the glass half empty to that half full. Sitting here in the early morning hours looking at carbon dates against a backdrop of climatic change including huge shifts in sea levels, I can see a pattern that explains variances in dates. There is still enough to write a synthesis for further test.                    

Wednesday, April 15, 2015

Confusions over corporate social responsibility and the creation of shared value

The term corporate social responsibility emerged during the 1960s. In 2006, Michael Porter and Mark Kramer popularised the term creating shared value. Whereas corporate social responsibility focused on doing the right thing because it was the right thing, something leading to a compliance focus, creating shared value suggested that corporations could actually make money by benefiting the communities within which they lived and operated. I quote from the wikipedia article on creating shared values:
The central premise behind creating shared value is that the competitiveness of a company and the health of the communities around it are mutually dependent. Recognizing and capitalizing on these connections between societal and economic progress has the power to unleash the next wave of global growth and to redefine capitalism.
That's a big claim. I mention is now because Mark Kramer has been in Australia as guest speaker at a conference arguing that:
The Australian government should outsource social services to the private sector by providing tax breaks to corporations behind business ideas that help the vulnerable, leading US business scholar Mark Kramer has said.

The co-founder and managing director of US-based social impact advisory firm FSG said the government played a key role in galvanising companies to come up with services that would be both lucrative for the provider, and beneficial to the disadvantaged and neglected sectors of society – a concept he labelled "shared value".

On the surface, the idea that Governments should provide tax breaks to galvanise the private sector to come up with innovative solutions has little to do with the original concept of creating shared values. That focused on business doing things because, in the end, business would benefit, a very different concept from providing tax subsidies to unleash business creativity to solve social problems.

I mention this now in part because I am interested in the evolution of ideas about the role of business in society and the way this translates to rules and structures, more because it links to a very current trend, the search for "innovative solutions" in meeting social needs at a time when government action is increasingly constrained by the combination of cash constraints changing views about the role of government.

I call it the search for a magic bullet, and it doesn't work. This doesn't mean that I am necessarily opposed to the concepts of either corporate social responsibility or the creation of shared vales. It's just that I find current discussions very confused. Certainly they confuse me!.

Tuesday, April 14, 2015

Economics, public policy and the importance of the small

On Tuesday 7 April, the Australian Chamber of Commerce, Business Council of Australia, Australian Industry Group, Australian Food and Grocery Council, National Farmers Federation, Property Council of Australia, the Minerals Council of Australia, and Restaurant and Catering Australia released a joint statement calling for renewed efforts on economic reform in Australia to boost competitiveness.  The prescriptions offered were pretty standard, drawing on the 2015 intergenerational report for support.

Both the Australia Government and opposition attacked the statement, if on different grounds. Why weren't you there when we needed you? said the Government,  Mr Shorten took pride in the fact he was being criticised for upholding fairness."Labor shares business frustration that the Abbott government, having bungled reform, now appears to have given up on reform," he is reported as saying. "Labor will support reform which is fair. Labor will fight reforms which is unfair." That's a bit like having two bob each way.

A week earlier, at the end of March, the Australian Government's tax white paper was released. It's being called a white paper in reporting, but it's more accurately a tax discussion paper. The introduction states:
The Government is committed to ensuring that everyone is paying their fair share of tax. This year, we are continuing to work with the G20 on the modernisation of international tax rules to address tax avoidance by multinational companies.  
But that is just the start. We want to have an open and constructive conversation with the community on how we can create a better tax system that delivers taxes that are lower, simpler, fairer (italics in original).  
To deliver lasting, workable reforms, the community needs to be on board and engaged in the conversation. That’s why the Government is committing to a comprehensive and inclusive process. Releasing this tax discussion paper marks the start of what we hope will be a broad conversation about the current tax system and the issues confronting it. All are encouraged to take part. This conversation will support the development of a tax system to build jobs, growth and opportunity — a better tax system to deliver taxes that are lower, simpler, fairer.
The reference to addressing tax avoidance by multinational companies reflects the growing political and economic importance of this issue. This piece by Heath Aston's in the Canberra Times, Energy company's $11 billion transfer to Singapore rings tax avoidance alarm bells, provides just a random example.

Down in Canberra on Wednesday 8 April, Thursday 9 April a Senate Committee held hearings on the matter.The links will carry you through to the Hansard transcripts for the two days. They make quite interesting reading.

Staying in Canberra, the Productivity Commission is inquiring (among other things) into workplace relations. Meantime, preparation continues on the Reform of the Federation White paper.

You can see that there are a lot of inquiries and studies under way. I have only listed a few! They take place against a background of apparently deteriorating Australian economic conditions; the headlines here are the decline in Chinese growth and the collapse in the iron ore price.

Meantime, over at his place, Winton Bates has continued his discussion on the problems and prescriptions as he sees them (most recently, Should young Australians be more concerned about their futures?, What tax and spending reforms might be feasible in Australia?) I notice that Winton doesn't get a lot of comments. That's a pity. His topics can be dry, his responses written from a particular and consistent perspective, but his posts are thoughtful and represent a significant contribution to debate.

Take Does the McClure report provide a basis for sensible welfare reform? This provides a succinct explanation of the New Zealand investment approach. I think that one of the challenges faced by Winton (or me for that matter) is to set our analysis in a context that will explain significance to a time limited non-technical reader. The McClure report with its use of the New Zealand model is an example.

At one level, you can look back and set the New Zealand investment model in a context set by previous New Zealand thinking. Does this matter? Why should New Zealand thinking be relevant? Well, New Zealand thinking has actually had a profound effect on Australian policy  thinking.

Two weeks ago, I was at a meeting. Listening to the discussion, I suddenly said that if we are going to apply the New Zealand model, we needed to be clear on its implications. Nobody had mentioned New Zealand, but most people knew what I meant.

This is the second level. Forget the headline stuff. That sets a context. We are, in fact, making key decisions now that will set the next part of Australia's public policy future. Those decisions are being set in a variety of discussions taking place at State and Federal level on the system architecture of future policy positions.

This is dry stuff, but it's also important.

When I look at the constant chatter that marks public political and policy debate with its now focus, most misses the point. From a long term perspective, it doesn't matter if the iron ore price falls to $US35. So what? We still have the iron ore. Firms that go broke will end up by writing off their debt. With that adjustment in place, with financing costs removed or at least reduced, economic mines will reopen, production will expand to meet the future increase in demand

What really matters are all the smaller longer term decisions we are making now, and those decisions are set withing a mental frame holding in multiple small meeting rooms around the country. It is that frame that we need to understand.        


Monday, April 13, 2015

Monday Forum - punctuation

Browsing, I came across The Punctuation Guide. Hat tip to Australian eBook Publisher for the link. The Guide is American, but includes a page explaining the differences from British English. 

I discovered punctuation quite late. Of course I punctuated, but I wasn't really aware of the way that punctuation could be used to enhance effect. This brings me to today's Forum topic: what is your favourite, least favourite, punctuation mark?

As always, feel free to go in whatever direction you want. I'm sure that you must have things that you hate.    

Wednesday, April 08, 2015

Old posts and the problem of broken links - revisiting the Brough intervention

I had intended to resume posting with a piece on the Tiwi Islands. This picture from Wikipedia shows traditional burial poles.

I knew that I had written something before, so searched around to find the posts. The Tiwi Island references date back to 2007 and were more fragmentary than I had expected.

One of the posts I found dated to 23 June 2007, Mr Howard, Mr Brough and Australia's Aborigines - 1. Is it really almost eight years since the intervention?

I felt a little sad reading the post, partly for personal, partly for professional, reasons.

At a personal level, I remember just where I was when I wrote. Other posts of the time contain references to the daily round of domestic duties as the primary child carer - Clare's hockey, cooking meals for the girls, the school runs etc.I miss it now.

At a professional level, so little has changed since the intervention. There have been advances, but we seem stuck in an endless loop destined to constantly repeat. I am not talking just about the problems in Aboriginal communities, but about the way that discussion within the Aboriginal community and beyond constantly circles.

I found that first Brough post to be good. It took a very long time to write because I was constantly checking sources, trying to provide the chronology of events. I think that the later posts were good too.

In checking the post, I found that formatting errors had crept in. Later when Google changed its system, a side quirk was the transformation of large slabs of text into red. I use red in quotes, but somehow the red then carried on into the text following the post, creating a big editorial correction problem.

I called the post up and started editing, checking the links as I did so.

In a recent comment, Winton commented about the problem of broken links in older posts. I agreed, suggesting that the problem was worst in the Government sector because of constant changes. Now in checking the links in the post I found that every Government link was dead.

There is enough detail in the post to follow the story without checking the sources. I left the links in the post with a footnote apology so that people would understand that it was based on research. However, you have to take my word without being able to check the original source material.

Having now revisited, I think it time to check all the posts in the series and provide a central entry point. The posts are not perfect, but they do provide a useful record.
  .  

Thursday, April 02, 2015

Break in transmission

I had been planning to post today, but then I ran out of time. In honour of Easter and because I need a break, a chance to reflect, I am stopping all posting until Wednesday next week. Feel free to talk among yourselves in the meantime - that gives rise to some pretty good conversations!