Sunday, October 24, 2010

A peek into Canberra, 1984

I had intended to renew posting on my Greek trip, but cannot do so properly until I have access to the photos. We downloaded the photos from the various cameras onto my wife's computer. However, she now has to transfer these to a memory stick before I can properly access them.

Just at present, I am going through the sometimes difficult process of tidying up books and papers. It's been something like an archeological investigation of my own past. In one of the books I found a part completed letter from 1984 that I had begun and then put aside for some reason. I thought that I would share it with you.

                                                                                                                                23 February 84

Dear Mum and Dad

It seems hard to believe, but since I got back work has been getting busier. The IAC Computer report arrived the day I left for Armidale, then the following week the IAC report on consumer electronics arrived. So did the Minister. He came back from overseas with some of his ideas clarified and immediately launched a policy review.

This really took me back. This was a time of fundamental change in Australian industry policy, the replacement of the old tariff based industry protection approach with a progressive move towards a low tariff, more open economy. It was also a time when we were trying to develop new approaches towards Australia's high technology industries. To help drive this, I had been asked the previous June to create a new branch in the then Department of Industry and Commerce, the Electronics, Aerospace and Information Industries Branch. This had to be done from scratch.

To help drive the process, the Department had decided to send a series of references to the Industry Assistance Commission on different aspects of Australia's electronics industries. Previously the Tariff Board and now the Productivity Commission, the IAC was a major driver of change towards lower protection. The advantage of the IAC process from our perspective lay in the fact references to it required a formal Government response, so the very act of sending a reference effectively mandated subsequent change. The IAC's normal stance was well known. However, since we controlled both the reference and the development of the subsequent response, we weren't necessarily bound to recommend acceptance.

Industry policy was one of the big divide areas in Canberra at the time.

My own Department caught up in the whole paraphernalia of the then protection regime - the crazy patchwork quilt of multiple tariffs, temporary assistance measures, dumping inquiries -  accepted that tariffs must come down, but wanted a phased process. Treasury who regarded us as captive to existing industry interests took a much more purist approach; free trade now, or the closest they could get. To this end, they also mounted a continuing campaign to try to get control of the IAC reference process.

In some ways I sat in the middle. I thought that the existing protection structures were simply crazy and had to go and as fast as possible. However, we had to find new ways of encouraging industry development or risk our manufacturing sector and the service sectors that depended on it simply imploding. I guess that you can put the three positions this way. Treasury said make us pure, my Department said make us pure, but not yet, and I just wanted to know what would work. Those who are interested can find out more about the policy debate in Case studies in public administration.

In many ways, the computer and consumer electronics IAC reports represent the divide between the old and the new.

We wanted Australians including Australian industry to have access to computer products at world prices. However, we also wanted to give Australian industry a chance of participating in the global computer industry. We therefore steered through a decision that abolished all tariffs on computer products, but also put in place a bounty on the manufacture of computers wherever they fell. This meant not just computers as such, but also computers embedded in other products.

By contrast, consumer electronics was just a mess. At the time that Australia decided to introduce TV, we also decided to adopt the PAL system whose patents were held by Australian firm AWA. Treasury, worried by the risk of no competition and faced by protests from Japan, steered through a decision that actually forced AWA to give a license to its Japanese competitors.

In the way it was done, this has to be one of the dumbest policy positions of all time. The result was that Australia not only lost any value in the patent, but Japanese came to dominate the Australian and global PAL market.

A little later and faced with the potential collapse of the Australian colour TV assembly industry, Japan and Australia negotiated a secret deal by which the Japanese industry via the Government agreed to limit competition in Australia for certain TV sizes, thus providing an effective non-tariff barrier. Inevitably, the IAC staff came across the existence of the earlier agreement. To them, it was an example of the worst type of protectionism and they decided to reveal its existence in their report.

All this broke soon after this area came under my control. I had no idea that the agreement actually existed, until the matter broke. Then all hell broke loose. The Japanese Government was very upset and brought what pressure they could to stop release of the details. The Department had earlier provided confidential briefing about the agreement, briefing that might now go onto the public record. The IAC was obdurate.

All this took the issue into the stratosphere well above my head. I talked to the Embassy and the IAC, but basically did as I was told. The thing I found interesting is that, at the end of the day, none of this mattered in a practical sense because it did not affect subsequent decisions. Today it is a minor and forgotten blip.

The last (the ministerial policy review) may well have good results, but for the moment its increased pressure. I have to release resources for it (including my own time); I'm afraid my heart sank. Still, after its all over, we should have moved forward. I'm also putting my foot down. The pressures have prevented me doing anything other than work, and that's not good enough, so now I'm refusing to do things. I've decided to limit my working day to a maximum of ten hours.

I cannot remember the details of the ministerial policy review, although I do remember the pressures at the time. Looking back, I seem to have been more disciplined then in a work sense. I preferred to start work a little earlier, generally about 8, and then tried to finish at 6. I would then work at weekends from time to time to break particular log jams.

For the life of me, I could not understand why some of my colleagues saw late evening hours almost as a sign of doing the right thing. This included gathering for a drink together after 6.30. I would do this from time to time simply because it was helpful. I noticed that I generally started earlier than them, and also questioned the effectiveness of their evening work. Certainly my output wasn't any less. I also had a problem with the sometimes expectation that junior staff had to alter their hours just to fit in.

It's interesting that I was sufficiently concerned at the time to keep a very detailed work log for three weeks listing everything every activity or interruption by time. At the end of that I made a few minor changes to my working approach, but was otherwise re-assured.       

H. arrived in town last weekend on her way to Melbourne to pick up Bear. Came Friday evening and went on Sunday, which was all very pleasant. Saturday afternoon she and I went to see Gorky Park, which was good. Then, on Sunday, I went to see Diva, which probed to be one of the best movies I've ever seen. French, with a taut plot and beautiful photography. One magnificent shot: a light house against a night sky, centre stage, with a road in centre screen up to the lighthouse. It was like a modern or semi-modern European painting.

I saw a lot of films at this time, more than I had seen before or since. I wonder whether or not I would still like Diva? I actually went to see it several times while it was on, something that I rarely do. 

I see from the Express that Manning Clark's Australia Day speech has generated a storm. Seems over-reaction to me. I can't agree with Clark's views. I don't like republics, like the present flag, and am generally (I suppose) a conservative. But even given all this, the most I think that Clark can be accused of is bad taste. This is, I admit, an awful crime. Speaking of taste (no, I know you weren't) its interesting the way our ideas are formed. I grew up hating fussy Victorian lines, but now that they are fashionable I'm learning to like them.

Interesting that I was prepared to admit that I was a conservative, something I felt the need to deny later in Why I am not a conservative. It's also interesting just how relaxed I was on the issues that Clarke raised. This dissolved just ten years later in fury over what I saw as Mr Keating's arrogant and contemptuous dismissal of symbols that I was attached to as belonging to the scrap heap of history. It would take me another ten years to recover something of the same degree of tolerance that I had in 1984; even now, a harder edge remains.

I grew up surrounded by Victorian furniture and its successors. The over-crowded rooms of older people that I knew contrasted with the clean Scandinavian lines that were the mark of good taste. Single with spare cash, I was then frequenting the auction rooms, especially looking at paintings. Hard to believe how well off in real terms I was then.        

Returning to work for a moment, with the car industry work now almost over, Don Fraser's attention is returning to my area and I can't bear it. 

The letter finishes here.

Poor Don. While all the car industry plan work was going on, he as Division Head had very little time for anything else. I briefed him and sought approval as appropriate, but otherwise he needed me to do my own thing. Now he was looking to re-assert his role in my area, and I didn't like it!

I can be a fairly assertive person. Managing up has always been one of my problems, one reason why I have written so much about it. Don and I worked the issue through, but it can't have been easy for him.  

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