Lone Pyne a Pyne too far?

Tonight, following up on Rabbit traps, broken promises and efficiency with a dash of history, I don't want to comment on the question of whether or not Education Minister Pyne's approach to education funding represents a breach of Mr Abbott's election promises. That will be much debated. I want to make a different point.

You can understand why some states are so upset. Think, for the moment, of the problem faced by state treasuries. Heavily dependent on Commonwealth funding, they have shifted spending to accommodate the demands of the Gonski funding arrangements. Commonwealth policy Instability plus excessive prescription has been a problem for quite some time.  Now their entire forward estimates are thrown into disarray. It's not a problem for states who have not signed up, they actually get more cash. It is a problem for the others.

The critical issue now is whether Mr Pyne's still to be announced proposals will be so much better as to justify the switch and any pain associated with it. I don't know. maybe they will. That's where we have to wait and see. I, for one, will be looking to future announcements to help me understand this point. It's the actual policy details that are now the main game.

Rabbit traps, broken promises and efficiency with a dash of history

The press reporting and commentary on the Abbott Government has become quite savage. Here are two examples from this morning's coverage:

• Abbott's boulevard of broken promises
• School funding porkies, snow-jobs and lame excuses

And here is a comment from Mr Abbott's side of politics: NSW Education Minister Adrian Piccoli rejects return to broken socio-economic status model for schools.

I commented at the start of yesterday's post (Mr Abbott's rabbit trap) that I was truly puzzled by aspects of the still new Australian Government's performance. I don't necessarily share all aspects of the commentary. For example, because I have long argued against mandates or over rigid promises, it would be hypocritical of me to attack the Government for broken promises. Equally, I happen to agree with the idea of raising the debt ceiling and suspect that Mr Pyne is right about excessive prescription in the school funding reforms. After all, that has been a consistent pattern across the former Government's approach to Commonwealth-State issues. All that said, there seems to be a sort of somewhat arrogant blind clumsiness in the Government's approach to policy. They appear to be working almost by rote. In doing so, they are arguably reducing their chances of bringing about real change.

In addition to Mr Abbott's rabbit trap, yesterday's posts elsewhere were Remembering Hunter Street and History revisited - fast-forward back in time for quick service. On the second post, it is a little galling to feel that while we have the wealth and technology to do more today, in some ways our efficiency and capacity to do things quickly is actually less than it was in the nineteenth century, at least so far as Australia is concerned. We are just too complicated to be either efficient or effective. 

I am heavily embedded in the past at present. On Tuesday,  Ending a Never Ending Story reviewed my progress on my major history project. Yesterday on my public Facebook page I wrote:

Discussion last night over dinner (Peking Duck) with youngest about the editing she is doing on that first fantasy novel she wrote while at school. It's 140,000 words and she is pruning in light of reader comments with the aim of getting it below 90,000 words. Then my train reading today was an historical analysis of life on Saumarez, a big station outside Armidale.

This may seem an odd conjunction, but the two are linked. I am trying to understand the detail of station life, the rhythms of daily life. I am fortunate because I have actually experienced some of these things from seeing a sheep killed and butchered for meat to early morning milking. Most modern Australians haven't.

What's the link? Most fantasy novels are set in a world not unlike that station. Between perilous adventures people ride, they eat, they stay at inns or camp, they lead armies, visit blacksmiths etc. I know one should not allow detail to spoil a good yarn, after all most readers won't see practical problems, but many would benefit from a little more recognition of the practical.

The practical issue in my mind is just how to bring the rhythm of station life alive. The station buildings at Saumarez were widely separated, inefficiently so in modern terms. But you had to allow wide spaces too, for example, turn a team of horses around.  

Mr Abbott's rabbit trap

I am truly puzzled by aspects of the still new Australian Government's performance. Perhaps, as NSW Premier O'Farrell observed, it needs to recognise that it is no longer in opposition. However, it is (I think) a little more than that. Among other things, the Government appears to have locked itself into a straight jacket based on an unsound financial and management model. They have, if you like, wandered straight into a rabbit trap of their own making. To understand this, we need to look at the last period of the Gillard/Rudd governments.

The Labor Administration sought to roll out new policies and especially its signature policies of national disability insurance and Gonski school funding. Previously in the case of both the mining and carbon taxes, Labor matched prospective revenue with new spend proposals.

Treasurer Swan was publically committed to return the budget to surplus, This meant that the Labor Government started looking for savings including public service cuts via the "efficiency dividends." New expenditure proposals were  announced, but they were largely accommodated via cancellation  or deferral of existing spend. As revenue progressively fell below budget, the budget dance increased with constant variation to the forward estimates.

For its part, the Coalition was following a similar process, trying to refine its offerings, always looking for offsetting savings, As part of this process, it also committed itself to Labor's signature reforms. Now the problem here is that the Coalition's calculations were based on shifting sands because the Government's constant search for savings to fund its promises constantly undercut the Opposition's plans and associated assumptions. We saw the results with the public service cuts and now with Gonski.

The new Government suggests that it's predecessor was in some ways duplicitous.  That may or may not be true, although much of the information required to undertake the required analysis was available on the public record. However, there is a deeper problem.

The shopping centre approach to politics requires parties to put forward specific expenditure proposals. The cost offset approach popularised by the Howard Government requires proposals to be fully costed and offset by identified savings elsewhere in the budget, The mandate approach requires Governments to commit to doing just what they propose, something Mr Abbott made great play of.

The present position demonstrates just how silly all this is. Oppositions always operate from imperfect knowledge. Instead out outlining broad objectives, the Abbott Government is locked into specific proposals that the mandate concept demands must be delivered with offsetting savings when the savings aren't actually there, at least in the short term without huge pain. All very silly. See what I mean?    

A note on Herbert Badham

My main post yesterday was A morning at NERAM - Flora, Cobcroft and Badham's Observing the Everyday. Back in March 2008 (Australian History and the art of Herbert Badham) I featured Herbert Badham (1899-1961) in a brief piece on Australian art. I had actually forgotten that piece, but was reminded of it by my enjoyment of his work in the exhibition at the New England Regional Art Museum.

I couldn't find a lot on-line, but did ab interesting piece in an auction catalogue from Bonhams relating to the sale of Travellers. I am repeating it here for reference purposes. 

Christine France writes:

Herbert Badham's Travellers 1933 is remarkable in that Badham manages to include two major aspects of his work in the one painting. His keen eye for portraiture is combined with his rich chronicle of Australian city and suburban life in the 1930s and 1940s.

His gentle realism is precise and unlike some of the Melbourne realists of the 1940s is free of ideology, either left or right, so no hints of class conflict intrude upon his images. Instead he concentrates on the uniqueness of the everyday, geometrically constructing and patterning his subject matter into a deeply satisfying painting.

Herbert Badham was born at Watsons Bay, Sydney, in 1899. On completing his schooling he worked briefly as a clerk before joining the Royal Australian Navy in 1917. In 1921, along with William Dobell, Douglas Dundas, Charles Meere and John Kilgour, he commenced his art studies at the Sydney Art School where he was taught by Julian Ashton, George Lambert and Henry Gibbons. This was a traditional art training based on the primacy of draftsmanship and leant strongly towards English realism. To this Badham added a modernist interest in perspective and curvic spaces that fascinated him both in terms of universal laws and as a means of structuring his work.

In 1932, the year before he painted Travellers, he was runner up for the New South Wales Travelling Art Scholarship, which was awarded to William Dobell. (Whether this disappointment had any reflection on the subject of the 1933 work is unknown.)
In these years Badham seldom exhibited his work, but in 1933 Travellers and two other of his paintings were exhibited in the Sydney Art School 1890-1933 retrospective exhibition held at the old Education Department Gallery.

From 1934 he exhibited regularly with The Society of Artists and in 1936 his painting Breakfast piece was purchased by the Art Gallery of New South Wales.

His first solo exhibition was in 1939 at the Grosvenor Gallery, Sydney. It was opened by Sir Marcus Clark and was favourably reviewed by the critic Howard Ashton who, at a time when Australian art was dominated by rural landscape, wrote "Mr Badham paints aspects of Sydney life which very few painters have the courage to tackle".

He is of course referring to the content of everyday life and it is this content which, today, gives us such a rich insight into the times. In painting pub interiors, street corners, beach holidays, fairs and town bands, Badham has given us an accurate account of the life, fashion, architecture, interiors and social values of his time - a point which has led to his work being included in many major exhibitions and collections.

Travellers 1933 is one such work, in which he places his triple portrait in the impersonal but everyday situation of riding home in a toast-rack tram. We quickly note the fashions of the day – a time when men wore hats, while the geometric print of the women's hats date it firmly in to the deco period of the 1930s, as does the simple day dress of the central figure and the fact that smoking was permitted on public transport.

The string holding together the small globite suitcase with travel stickers speaks of the depression era when things were kept, mended and cherished. Evening papers were bought from the paperboy on the street corner and read on the tram going home. Tram drivers and conductors wore neat navy blue uniforms complete with hat. Outside the hillside of suburban houses with red tile rooves and liver brick or stucco walls again locate the period, as does the small bunch of flowers worn by the central figure - these were sold by men with baskets in Martin Place or the top of Rowe Street, Sydney. In choosing to present the central figure frontally and the two side figures in profile, Badham creates a snapshot immediacy which is also conveyed by the juxtaposition of the three hands and matches in the lower centre of the painting.

Although the figures are placed in a situation of casual observance they are in fact people close to Badham. The central figure is his sister Nina, his brother Maurice is on the viewer's right and a yet to be identified friend is on the viewer's left. 3 Badham's daughter relates that her aunt would have been quite young at the time and perhaps not quite so socially relaxed as the two men. She also commented that the striped jacket worn by the standing figure on the right was similar to an I Zingari cricket blazer worn by Badham's English father.

Although not as adventurous as his later works, the painting clearly shows Badham's interest in geometric structure: the work is vertically bisected while connecting diagonals run from the crook of the two men's arms. The quality of Badham's paint is smooth as is his almost photographic modelling, and like his teacher Lambert he enlivens the surface with highlights of white.

There is often a teasing sense of humour in Badham's work. In Travellers the penalty notice is bent over, leaving us to guess what might be the offence which incurs such a substantial fine for the times. Likewise we are left wondering if the sign above the driver's head is the tram's destination or a no-smoking sign?
In order to support his family Herbert Badham taught at the East Sydney Technical College from 1938-1961 and is remembered as popular teacher, but also one who gave his students a good grounding in perspective. His book A study in Australian art, published in 1949, does as Nancy Underhill points out 4 pose very interesting and to date undervalued views on Aboriginal art, patronage and the purpose of art in society. He admired Aboriginal art because it was central to life, and in many ways it was an attitude that was central to his own work.

Travellers 1933 remains one of Badham's finest and most interesting paintings, important as a social document and an example of modernist realism.

Resuming posting

I haven't been reading the papers while away, so I have been out of touch.

This morning's Fairfax/Nielsen poll result showing Labor ahead came as a bit of a surprise. Within the results, a key indicator was the relative collapse in support  for the Government's handling of refugee policy. Only 42% approve of the Government's handling of refugee policy, 50% disapprove. That's a big shift.

This week my main writing focus will be on my other blogs. I have some catch up to do. However, I will post links here so that those interested can follow.  

Pause in posting

I  have been travelling, making it difficult to post or indeed keep in touch. In a way, that's been quite pleasant, living in a different world. Regular posting will resume tomorrow,

Australian life - the selfie

Have you looked at The New Daily yet?  This is Australia's latest newspaper, just on line. It's mainly an aggregator, but its another source of information.

I see from The New Daily that the word selfie appears to be of Australian origin. I quote:

Oxford Dictionaries says in mid-September 2002, an Australian wrote on ABC online: “Um, drunk at a mates 21st, I tripped ofer [sic] and landed lip first (with front teeth coming a very close second) on a set of steps. I had a hole about 1cm long right through my bottom lip. And sorry about the focus, it was a selfie.”

Although “selfie” can be traced back more than 10 years, it only gained momentum throughout the English-speaking world in 2013.

Research suggests its frequency of use has increased 17,000 per cent over the past 12 months.

Thank you, Kevin!

Digging further, this ABC story suggests a strong linkage to New England. Again I quote: 

Hopey had started the forum thread seeking advice about whether licking his lips would make his stitches dissolve too soon. He went on to offer:

"Anyone wanna see a picture of it? It's pretty cool."

Hopey then posted a link to an image that was uploaded on the servers of the University of New England in Armidale.

The link is now dead - but the ABC was able to recover the photo via the wonders of the Internet Archive's Wayback Machine.

One thing is for sure: if this is the first selfie, it was not posted with the goal of garnering 'likes'.

Now the search is on to find Hopey!

The value of the ABC's Factchecker

I really like the Australian Broadcasting Commission's Fact checker activity. This proclaims itself in these terms:

ABC Fact Check determines the accuracy of claims by politicians, public figures, advocacy groups and institutions engaged in the public debate.

I find it very useful. It is not without it's own weaknesses, but it does provide a useful starting point for further analysis. Consider this piece from 18 November, CSIRO job cuts: Greens MP Adam Bandt turns to spin. It begins:

A hiring freeze at the CSIRO could mean a quarter of staff are let go within a year and it's all because of the Federal Government's anti-science bias, Greens MP Adam Bandt says.

As it turns out, the Commonwealth Scientific and Industrial Research Organisation is not part of the public service, It's numbers don't count in public service numbers and hence in the staff cut targets. But wait, there is more.

While not formally bound, the CSIRO is following the public service approach. However, one factor here is that the job cuts are linked to the increased "efficiency dividend" introduced by the former Government. This led Robert Burgess to write on Business Spectator that Mr Abbott does not need new draconian measures to achieve his target cut in public service numbers. In fact, the cuts already underway will more than deliver the target!

Interesting isn't it? This then leaves a new question open. If the cuts made by the Labor Government would in fact deliver Mr Abbott's job target, what is the significance of Mr Abbott's changes? How do we disentangle them?  

Do have a browse of the various fact checker analyses. You may find them interesting. 

Postscript

In today's Financial Review, a very agitated Treasurer Hockey provided an answer to my questions in the second last paragraph. Well, he wasn't answering me intentionally, I doubt that Mr Hockey has time to read this blog, but he has answered them. In The real scope of Labour's deceit is coming to light, Mr Hockey appears to have discovered a real problem. It can be broadly summarise this way:

1. The "efficiency dividends" imposed by the previous Government that the Coalition accepted equates to 14,500 public service job cuts.
2. The Coalition did not realise this when they did their analysis and proposed 12,000 job cuts, building the savings into their proposals. This actually meant 26,500 job cuts.
3. You can't easily cut 26,500 jobs, so there is a new budget gap, compounded by the need to pay redundancy payments to people losing their jobs from the Labor cuts.
4. It's all the fault of perfidious Labor.

Given that I have been attacking efficiency dividends as a blunt instrument, given too that you could work out cuts in public service numbers must be involved, I fear that I am not as sympathetic as I should be.           

Monday Forum - a weariness in the bloggosphere?

Over at his place in Requiem, Neil announced his attention of withdrawing from commentary on current politics:

Friends, so depressing is all this and more in this dark time for Australian politics – not just beginning at the last election either – that I have decided to opt out of further commentary. This blog will become exactly what it says – a Commonplace Book of images, quotations, reviews, nostalgia and history, sometimes music, and sometimes recycled matter from my long back catalogue of blog posts.

marcellous commented in response:

I understand how you feel. I find myself taking pretty much the same approach, though maybe it is also because of the change in the temperature of the blog world (attention to current issues seems to have Twittified, a step I haven’t taken).

Neil responded:

It is also true that I am still sounding off on Facebook or even Twitter — or at the very least posting links to things I do want people to see.

Is it my imagination, or is there a sort of weariness in at least the Australian blogging world just at present? On a number of the blogs I follow, posting has declined in frequency. As marcellous notes, some have become twittified. Others like Neil or Helen Dale use Facebook extensively. Still others are using LinkedIn groups on the professional side instead of blogging.

Like my blogging colleagues, I use other platforms too, experimenting with different combinations. This takes time. For example, after I post, I put details of the post on my public Facebook page or on Twitter; I tend not to use Linkedin groups very much. All this takes time. Then there is the time involved in scanning feeds.

My personal Facebook page has become quite a useful resource, for there I find many of those who used to blog frequently. However, this is also a trap, for it leads me to post things there that once I would have put on the blog. Why a trap? There is a sort of sugar rush from the immediacy of interaction, but I am reaching very few and it's also distorting the main purpose of the page.

I know that many of those who read this blog read many others as well. What's your perception of the present state of the bloggosphere? Has it become weary? 

Sunday Snippet - Avant-Guard Dog

This one came via Facebook. It really made me laugh at a time when there is too much negative news around.

It seemed to be a newspaper clipping, so I searched around for the cartoonist.

Dave Coverly is obviously well known, especially  in the US. This is his web site. It's worth a visit, for he obviously has an eye for the ridiculous and quirky.  

Saturday Morning Musings - storylines, the outback with a dash of history

This morning's post meanders through some of the offerings from my fellow bloggers, starting with Gordon Smith's lookANDsee. Nearly every year, Gordon heads west from Armidale on an outback tour, posting photos as he goes. Gordon is a good photographer, and his photos take you to iconic places that are now largely unseen by most Australians.

Cameron's Corner on the sign below is where the state boundaries of New South Wales, South Australia and Queensland meet. Here you can have three new year's eves if you feel so inclined, for this is the junction of three time zones! 

To follow Gordon's trip, go to the first post in the series, and then follow through by clicking newer entries. While doing, take some time to browse by following some of the links. It will introduce you to a new but also very old world.

Australia's Aboriginal peoples use the term storylines to describe the way that that the world around and within is populated, integrated, through story. We all do it, Stories make the world real, they help us to remember and to relate present and past.  

As an example, over on Freedom and Flourishing, Winton Bates' Why seek out the statue of Adam Smith when visiting Edinburgh? is a story. It centers on Winton's pleasure at finding a stature of the economist Adam Smith on the Royal Mile. Smith is one of Winton's heroes. He puts it this way:

I went looking for Adam Smith because he is the father of modern economics and because his views on the benefits of specialization and free trade have contributed to a vast improvement in living standards over much of the world over the last couple of centuries. But I suppose that is the kind of thing that might be said by anyone who views himself as a disciple of Adam Smith.

Winton goes on to reflect on Smith's views. The story reflects Winton's current interests, but it also links Winton's present and past, from his student days at UNE through his work and personal experiences that have formed his own views.

This brings me to another point. We all read things in different ways. Because I have known Winton for such a long time, I interpret the piece in a particular way. Winton is part of my own storyline. This provides a particular context. Then, too, I happen to love the Royal Mile, That's another small part of my storyline. So I listen to Winton's story in my mind from a number of perspectives. It's not just the words, but the way I interpret the words.       

Moving right on, I enjoyed marcellous' Feelings high in Yunnan, but another story Living dangerously left me feeling uncomfortable and a little sad. Sometimes there are things I don't want to know.

On The Resident Judge of Port Phillip, Janine Rizzetti's short post Uplifting Quotes for the Uninspired Historian #18 quotes the words of June Philipp on the writing of history. I hadn't heard of the Melbourne School of ethnographic history, but since my history honours thesis was an ethnographic piece, my attention was caught. The short quote is worth a read. It captures something that I support.

The writing of history is not about the progressive reinterpretation of the past in light of the present, although that is inevitable to some degree. I do it myself! Putting it in storyline terms, we always interpret in ways that fit with our own stories. Still, to my mind, the core of historiography lies in the attempt to understand the past stripped of the present, to get inside the minds of those past actors.

I was going to finish this post with a visit to Michael Pettis's China Financial Markets, and then this warning came up.  

You attempted to access:

http://blog.mpettis.com/

This is a known malicious web site. It is recommended that you do NOT visit this site. The detailed report explains the security risks on this site.

For your protection, this web site has been blocked. Visit Symantec to learn more about phishing and internet security.

Good lord!  I think that Michael's site was hacked at one point, but I was looking at it yesterday. Now I need to find out what is happening. I am cautious enough not to want to access in the face of that warning. It's a pity because I wanted to use his latest piece to explain something about the basic arithmetic of international economic activity.  

Where might the workers come from?

In  Parkinson's law of government and associated matters part 1, I referred to that excruciating press conference with General Campbell. Now the Australian Government has moved to split the border protection briefings into two, saying that it wants to protect the integrity of the Australian Defence Force. It should have thought that issue through from the beginning. Meantime, Mr Abbott finds himself in a degree of trouble over the refusal to allow an asylum seeker to stay with her premature baby.

Leaving these matters aside, in yesterday's post Why Australians aren't spending - the effects of growing casual and contract work on the consumption function I looked at the ways in which the growing proportion of casual and contract work affected the consumption function, making Australians less willing to spend.

Tonight's short post focuses on another aspect of the labour market. To set the scene, we need to distinguish first between actual and potential GDP. Actual GDP is what is produced, potential GDP is what might have been produced if the economy were operating at full capacity.

This spare capacity is quite important during upturns. As the economy expands, more labour is applied to existing capital stocks. Machines are worked harder, more people are employed, output expands and productivity increases. One of the interesting if depressing things flowing from this downturn is that there is some anecdotal evidence to suggest that in at least Europe and the US, potential GDP has actually declined because of lower previous capital investment as well as declines in work force capacities. This limits the scale and speed of recoveries compared with the past.

There is, I think, some evidence of this in Australia too. Outside mining, investment has been quite low. There has been something of an investment strike to go with the consumer strike, with business focused on cost cutting. Further, while the unemployment rate has stayed relatively stable, that has occurred because the participation rate (the proportion of working age people actually in the workforce) has declined.

There are a fair number of people around at the moment already engaged in or at least connected to the workforce who would like to work more hours. They aren't making enough to meet their needs. So as the general economy expands, they can either expand hours or enter jobs. Now we run up against basic constraints.

The first is the production constraint created by low investment. Firms will invest if they can see profits, but it will take time for capacity to expand. The second is people. If expansion is to continue, people will have to be drawn back into the workforce, and those people will have to come from three main groups:

• The young who are engaged in neither work nor study, who have been dropping out.
• Women, for the female participation rate has declined.
• Older men (50+) who are dropping out of the workforce at an increasing rate.

The difficulty is that none of the standard prescriptions that centre on mandated training actually see to work with any of these groups. A new way needs to be found.           

Why Australians aren't spending - the effects of growing casual and contract work on the consumption function

In the latest political round, the Greens and Opposition have combined in the Senate to effectively block the immediate increase in the Australian Government's debt ceiling from $300 to $500 billion by passing a motion limiting the increase to $400 billion. The Government won't accept that, so the matter will have to go back to the Senate at a later date. 

While this gives the opposition some satisfaction in reprising the Government's words and approach, this is silly stuff. It is also a tad dangerous. Among other things, it gives the Government a lever, should they want to use it, for further expenditure cuts. And we don't actually need that just at present. However, this is not what I wanted to write about this evening.  

Today's post explores a simple question. Why aren't Australians spending?

Retail sales have been relatively stagnant over the last few years. Effectively, consumers have been on strike. There have been good practical reasons for this. In Australia as in may other countries, personal debt levels rose during the long period of economic growth, supported in part by rising asset values. Savings rates dropped to very low levels.

This process went into reverse following the global financial crisis and subsequent global recession. People sought to save more, to spend less, to de-leverage, adding to downward economic pressure. The effects were muted in Australia by the mining boom, but persisted nevertheless. However, this is not the whole story.

You can see this in the way that commentators discuss consumer spending. They are puzzled at the continued reluctance to spend when Australian economic performance has, in fact, been quite good. Some look at the increase in on-line sales, others suggest that de-leveraging has not yet finished, some point to continuing uncertainty.

My view is a little different. I think that there has been a structural shift in the consumption function linked to changes in workforce structures.  

Work force flexibility is very important to individual businesses. It allows businesses to more easily expand or contract numbers employed to meet changing business circumstances. This aids viability at firm level. However, the growing proportion of the Australian workforce working in contract or casual roles has affected consumer behaviour. Greater work uncertainty requires people to hold larger cash reserves, as do the periodic employment gaps often associated with such work. It also depresses Christmas sales, since a not insignificant proportion of the workforce is now only paid when they work. Christmas is actually a low income period for many people.

Let me illustrate with some simple hypothetical maths.

Say you are paid $200 per day, but only when you work. Say the Christmas shutdown period is two weeks. Say you are paid weekly. Then at Christmas you face three weeks without income, two because you are not working, one because of the week's lag before your first pay comes through. So to get through Christmas you have to save to cover both foregone income and the extra spend associated with Christmas. This means that you have to save a minimum of $3,000 (three weeks times $1,000) to give you you your normal cash availability plus whatever cash you need to buy presents etc.  

The story doesn't end there, for contract and casual workers on rolling contracts have to consider the potential lag between jobs, When might my current work finish, how long might it be before I get more work? Money must be saved to cover this. This has two effects.

The first is that a casual or contract worker will necessarily need to hold more cash reserves than a permanent worker on the same notional pay. This leads to a shift in the consumption function while the necessary reserves are built up. People spend less. Once the necessary reserves are there, spend as a proportion of income can increase, However, we now need to factor in a second factor, uncertainty.

The greater the uncertainty, the more people will want/need to save. This is both structural and cyclical. In structural terms, people just need to save more in general, leading to a shift in average savings. However, marginal spending will also shift up and down. As uncertainty increases, people will cut back on spending. Conversely, as they feel more secure in their jobs, they will spend more.

Just at present, uncertainty is quite high, although recent increases in consumer confidence have flown through into an increase in retail sales. How people will respond the Commonwealth Government's latest cut backs is still to be seen. My feeling is that it will act to depress growth in consumption beyond those immediately affected.      

Australian life - that's Sydney

I have a love-hate affair with Sydney.

I love the city's variety and beauty, but dislike its pretensions. It is a wonderful place to visit and just spend time wandering through, but increasingly its becoming hard to live there.

I haven't checked the latest statistics, but the median Australian income is about $50,000. That is, half earn less than this, half more.

In Sydney, the median house price has reached $722,00, close on fifteen times the median income. In Sydney, rental vacancies have again dropped below two per cent, The median rent for all dwellings in greater Sydney has reached $470 per week. In the inner ring, the suburbs immediately surrounding the central city, the median rent for a two bedroom house or apartment is $600 per week. That's quite a lot of money, more than a person on the median income can afford.

These price effects are creating some quite interesting and indeed profound social changes. The Sydney papers such as the Sydney Morning Herald have been featuring a series of stories on what we might call inter-generational conflicts. The house owning old want to realise or manage their assets to support their retirement. The non house owning young want to access those assets to help them into housing.

You can see why conflict might result. Young Sydneysiders even in the professional class struggle to save the basic deposit to buy a place without parental top-up.

Once you do have your first place, life becomes easier so long as you haven't over-borrowed too much. Your own savings plus capital gains allow you to think of a bigger place. You don't have to worry about moving, a constant issue with those renting. Now you can happily join the Sydney real estate game!   

Parkinson's law of government and associated matters part 2 - Mr Abbott's bludgeon

Continuing from Parkinson's law of government and associated matters part 1, I need to make an important qualification. To the degree I add value to the on-line discourse, it lies in large part in my ability to make objective comments. Crikey, to use an old Australian phrase, that's hard!

In my last post, I observed that the Australian Government's refugee policy had made relations with Djakarta somewhat fractious. That has continued: Tony Abbott warns Jakarta on refusal to accept asylum-seeker boats. Mr Abbott has a point on search and rescue zones, although I'm not sure of the wisdom of expressing it in just that way. This was an Indonesian reaction yesterday to the continuing stoush: RI rejects Australian dictated solutions on people smuggling.

I am not quite sure where we go from here. Presumably Australia can refuse to provide assistance in Indonesia's search and rescue zone, Indonesia can continue to refuse to accept boat people back. Indonesia can also retaliate in other ways. Beef imports, for example. In all, a bit of a mess.

Recruitment Blues

As part of the Government's attempts to reduce Commonwealth public service numbers to meet its 12,000 reduction target, the Commonwealth has limited intake of new graduates and announced that contractors will not have their contracts extended unless a very special case can be made. This affects the national research organisation CSIRO in particular.

Both freezes on recruitment and termination of contractors are fairly standard Australian governments' first stage responses to a stated desire to reduce the number of public servants. I say governments plural because it applies at all levels. Sadly, it doesn't work very well. This is not a political comment, merely an empirical observation.

The public service has to do a certain level of work determined by what government demands. Yes, with improved productivity fewer people can do more work, although this raises another set of issues. To my minds, the commonly expressed nostrums about public sector productivity and ways to improve it are just that, nostrums. Yes, if you cut functions you can cut staff. But otherwise the work has to go on and that means people.

Blunt, bludgeon cuts of this type have several effects beyond immediate morale and performance issues. If you cut entry level recruitment for long enough, gaps start opening up at the bottom of agencies. The pipeline that allows you to fill new higher level positions from within diminishes. This is compounded by restrictions on lateral recruitment. Normally, and this is why there are so many contractors, agencies fill urgent gaps on a temporary basis via the contractor marketplace. However, in this type of freeze, that's not possible for the contractors themselves are going.

Suddenly, the cut backs go critical. Agencies start telling Ministers they can't do things. They announce, as the Australian Bureau of Statistics did under the Howard Government, that key services are being withdrawn. Forced recruitment now begins.

In the past with limitations on lateral recruitment and especially contact staff, this manifested itself in an explosion in entry level recruitment. Today, it manifests especially as an explosion in the number of contractors since this gives a much faster fix. Now the base is being laid for the next round of cuts.

Interregnum

This post has proved remarkably difficult to finish because the swirling tide of events keeps overtaking my writing! Ms Gillard is selling her house in Melbourne, Mr Rudd has suddenly resigned from Parliament, the dispute with Indonesia continues (here, here) and the new Parliament looks just as fractious as the old despite the Prime Minister's somewhat quaintly expressed hope that everybody will turn over a new leaf.

Meanwhile, action and discussion on economic and other policy issues continues in the middle of some quite remarkable lecturing through the financial press. Events seem to have brought out the ideologue in all of us!

I admit defeat in terms of what I had wanted to do in this overview post. Instead, I am going to chunk the material into more bite size bits for future use. 

Parkinson's law of government and associated matters part 1

This morning the first of a two part round up of some of the events of the last week.

Refugee Policy

The now famous "press conference" with Australian Minister for Immigration Scott Morrison with Operation Sovereign Borders Commander, Lieutenant General Angus Campbell, was just plain embarrassing. I felt sorry for General Campbell. He didn't handle it well, but that's not his job. After the first question, he should have flicked it to the Minister since his inability to comment was set by political bounds.

Media resentment over the Sovereign Borders press rules has been growing for some time. Now the Abbott Government's attempts at media management have turned into the Government's first media disaster, with the media pack in full pursuit. Who would have thought that Indonesian sources including the Jakarta Post would become such an important source for domestic Australian news? If you want to control reporting, best make sure that you can actually control it! 

Meantime, the combination of refugee policy with the espionage dispute has made Canberra's relations with Djakarta somewhat fractious.

Lake Jabs

In response to my Lake Jabs post, inveterate fellow researcher kvd came up with a source for daily weather forecasts on the Antarctic lake. It appears that the weather is dry but cold. Digging further, kvd provided further proof for the accuracy of Godwin's Law. This states that  as an online discussion grows longer, the probability of a comparison involving Nazis or Hitler approaches 1.

In kvd's case, it took him two comments. The trigger was USN Operation Highjump (1946-47) during which Lake Jabs was photographed for the first time. What I didn't know nor, I suspect kavd, was the mythology that grew up round this expedition. Did US Navy battle UFOs protecting Nazi Antarctic sanctuary in 1947? is an example.

ACT BBQs and Parkinson's Law of Government

British naval historian C Northcote Parkinson articulated a number of useful laws. His best known, Parkinson's Law, is that work expands to fill the time available. Parkinson's law of boards states that boards will focus on things that they can understand regardless of important. To illustrate he compares discussion on a bike shed with a nuclear reactor. Parkinson's law of organisations suggests that organisations who build monuments are always past their peak. he gives the Roman Catholic Church and British navy as examples. 

I would offer a variant of Parkinson's Law. As the power of governments declines, they spend more time attempting to control and regulate the things that they think they can or, more often, the things that people think that they can. More and more this limits government to what we might call the social domain.  

Most time the citizenry just rolls over, it's all too hard. People cope as best they can by selectively deciding what to ignore, what to comply with, recognising that the volume of law and regulation has reached the point that no-one can actually comprehend the full range.  

Sometimes Government actions are just so silly people actually react. The ACT BBQ laws are a case in point. These articles from the Canberra Times will give you a feel:

• 3 November 2013 Charity barbies under fire
• 3 November 2013 No need to drag fund-raising barbies over coals
• 10 November 2013 Gas bottles: BBQ war's second front

I will leave you to read the stories to get a full feel, but this quote from the Canberra Times editorial will give you a feel:

TONGS will be quivering across the territory this weekend with news that the ACT government is involving itself in the barbecue business.

More specifically, the government has introduced regulations requiring those making money from regular barbecues to engage food safety officers and pay up to hundreds of dollars to train them before they are allowed to oversee the darkening of the first snag.

This became a bridge too far for it directly attacked all the voluntary groups from school P&Cs to Rotary Clubs making money from community BBQs. Now the ACT Government is engaged in a hasty backtrack.

Parkinson's Law of Government and the Abbott Administration

The still new Abbott Government has also been wrestling with Parkinson's Law of Government. Here I quote:

The Government is determined to deliver on its election commitment to reduce the cost of unnecessary and inefficient regulation on business and the community by at least $1 billion each year, every year.

Regulation won’t be the default position for government and will only be imposed where unavoidable.

Cabinet submissions will henceforth require regulatory impact statements that quantify the compliance costs imposed and matching compliance cost cuts where regulation is unavoidable.

Excessive, unnecessary regulation stifles productivity, investment and job creation and saps business confidence.

Over the last six years, more than 21,000 additional regulations were introduced, productivity declined and Australia fell in the global competitiveness rankings. There are currently more than 50,000 Acts and legislative instruments, many of which are a handbrake on Australia’s ability to get things done.

The Government’s new approach recognises that regulation has a cost. Responsibility for the deregulation agenda now sits with the Department of Prime Minister and Cabinet to ensure there is a whole-of-government approach to this critical issue.

To further streamline government and reduce duplication, the Government will also abolish or rationalise 21 non-statutory bodies where activities are no longer needed or can be managed within existing departmental resources.

The abolition or merging of a number of advisory bodies at the one time has the advantage that it blunts the capacity of the supporters of any single body to mount a counter-attack. It is also cosmetically useful is in demonstrating action when more substantive action depends upon future work.

Something similar applies to the Treasurer's announcement that action was being taken on no less than 96 previously announced taxation measures that had yet to be legislated. I have given the link so that you can look at the initial detail provided. Some will proceed, some are cancelled, others are subject to further review.

In the tax case, some of the measures are minor, but others are substantive. We need to see more detail before making final judgements.

More broadly, to a degree at least, the Government appears to be attempting to use regulation to control regulation.  The requirement that cabinet submissions will henceforth need regulatory impact statements that quantify the compliance costs imposed falls in this case. As an aside, I don't understand the second part of this sentence: "and matching compliance cost cuts where regulation is unavoidable"; am I just tired?; perhaps someone can explain. It seems to mean that you can add a new compliance cost so long as you have an offsetting saving elswhere. 

I have long argued that proposals involving new regulations should be subject to some form of cost benefit analysis; Septic tanks, swimming pools and the burden of compliance is a recent repetition of a now well worn theme. In the end, action to reduce regulation and the associated compliance burden depends upon attitudes, not rules. Ministers and departments are the starting point in deciding what not to bring forward.

I may be wrong, but I think that the Abbott Government is too authoritarian, too deeply enmeshed in the current rules, risk and measurement based political and managerial climate, to do more than remove or amend rules in those areas where it has the strongest ideological stance in favour of reduction.

Tomorrow, among other things, budgets, bludgeons and a bit on the Australian male. 

 

. 

Lydia O'Neil's Dinkum Aussie

Ursh, a Facebook friend of mine, collects old books, particularly anything to do with Australia and the Australian Military.

Among her collection is a book of poetry published in Brisbane by Watson, Ferguson & Co. Ltd. in 1924 and written by Lydia M. D. O'Neil. The poems are about Lydia's travels around the world during WWI and her time in Brisbane and in particular the Wynnum, Manly and Lota areas of Brisbane.

I had not heard of Lydia O’Neil, so looked her up on the AustLit data base. I quote:

O'Neil's maiden name was Dunham. She was educated in Pennsylvania public schools in the United States and published short stories in American popular magazines from 1913 to 1934 with her peak output being 1918 and 1919. A story, 'Pennsylvania' also appeared in Stockman Stories (1913) and was originally published in the National Stockman and Farmer, a Pittsburgh publication. O'Neil lived in Brisbane, Queensland, during the early 1920's before moving to Killarney on the Darling Downs. She contributed poetry, fiction and magazine articles to Queensland and other Australian newspapers and journals including The Bulletin. H. A. Kellow's Queensland Poets (1930): 246 comments: 'The courageous poetry of Lydia O'Neil, devotee of the creed of Kipling and Noyes, braves its discipleship in Dinkum Aussie (slang for 'genuine Australian') and leaves no observance out. For Miss O'Neil loves to write of soldiers and sailors and other of the King's men, of bonny jackaroos, of lean brown men nursed in a lean brown land - Australians all;...She is a typical extraverted sensationist, viewing Port o' Spain, Hong Kong, Alaska, Norway, Bokhara, or Ning-Po-Fu! The romantic glamour of these places lies primarily in herself. And so everywhere she puts a brave face on the outside world; there is the will to make the beautiful and to see all things at their best, as that best is conditioned by the poet.' (Source: J.H. Hornibrook's Bibliography of Queensland Verse With Biographical Notes (1953): 58)

The book opens with Ursh’s favourite poem of all. I wonder how many modern Australian men would recognise this image of them?

DINKUM AUSSIE.

He is long, he is lean, he is wiry;
He is loose-limbed and carelessly hung;
He is quick on the flare-up and fiery;
He swears with an eloquent tongue.
He's at home on a horse or a camel;
He could sleep in the top of a tree;
He'll try anything twice, and again if it's nice,
For a dinkum Australian is he.

His skin is as brown as a gipsy's;
Like a gipsy he's thoroughly versed
In the lore of the high-stepping ponies;
He is blessed with a marvellous thirst.
He smokes cigarettes by the thousands;
He is happy-go-lucky and free;
Independent and shows it, and "don't care who knows it,"
For a thoroughbred Aussie is he.

His fingers were born to a rifle;
His long legs for marching were made;
He'll stand up to the world to a finish,
And go down, if he goes unafraid.
For he's lord of the earth and its master,
The mountains thereof, and the sea;
Don't dispute or forget it, or he'll make you regret it,
For a dinkum Australian is he.

In love as in war, he's a terror,
Whom nothing can daunt or dismay;
If he doesn't run after the sheilas,
He never, at least, runs away.
His eyes are brown blossoms of passion,
Gold-glinting, a glory to see;
Sparkling and sprightful, and wholly delightful,
For a red-blooded Aussie is he.

He may hail you in French or Egyptian,
As suits his immediate whim;
The slang of Port Said and Toowoomba
Alike are familiar to him.
For he's gone where his banners have beckoned,
And his tremulous drums made their plea,
And he's picked up the platter of half the world's chatter,
For a dinkum Australian is he.

Right down to his toes he's a gambler,
A sport to his very last breath;
He will laugh in the face of disaster,
Toss pennies or guineas with Death.
He puts not his trust in his princes,
But dare to asperse them, and see
With what personal feeling he'll send you far-reeling,
For a loyal Australian is he.

He is lovable, natural, forceful;
He is versatile, vivid, alert;
Audacious, courageous, resourceful,
Aspiring, inquiring, expert.
He's at home in the air or the water,
For a dinkum Australian is he;
And I've done some hard thinking, and I'll say without winking,
It's a dinkum Australian for me!

Australian life - bush toilet

Nowendoc is a little village a little off Thunderbolt's Way at the southern end of the New England Tablelands. Coming back from Armidale, I stopped to go to the loo. I had been there before, but initially couldn't see it. Then I realised that it had been landscaped! It's actually quite pretty.  

Electronic espionage - a bridge too far?

The repercussions from the Snowden affair roll on. This is current Australian coverage: here, here, here. This is Indonesian coverage from the Jakarta Globe: here, here.  The Jakarta Post does not appear to be covering the story, although I was interested to learn in passing that  Mt Toba may erupt again, while marriage registers are in short supply. I am easily distracted!

Whatever Mr Snowden's motives, he has done damage to Australia's relations with Indonesia and potentially other countries. All countries spy, while Australia's intelligence cooperation with the US is well known. The problem arises when you get caught doing it. That said, I am inclined to agree with the Indonesian Foreign Minister's reported comment that this isn't cricket.

I think that this is one of those examples of the because I can I will problem. The apparent blanket tapping of all messages and conversations is a very blunt instrument. I suspect that the angst we are seeing in response is not the normal somewhat formalised protestations associated with getting caught at doing something that all do, nor even concern at US technical capacity. Something far more personal is at work.

If you think about it, how would you like your personal conversations caught?

Say you are a political leader from any country. Your conversations cover a range of personal and political matters, express a range of emotions; love, lust, anger, your children's problems, your plots against a rival. Now you learn that that all that detail has been caught by a foreign spy agency. Someone is listening to your most trivial and human day to day responses. You feel outraged, but you may also feel fear that material may be misused or leaked. That, I think, is why the response has been so strong. The response is personal. not professional. This is a bridge too far.

Lake Jabs

I received a letter from a friend today. Just for her, this is Lake Jabs in the Antarctic.

Monday Forum - a miscellany

Early this morning finished a long piece on the outlook for the Australian economy in 2014. I still need to do a final edit check on that and another piece, I have my usual history column to finish Thursday, but otherwise I am free of the external deadlines that have bedeviled my blogging. So tonight I just want to meander across a few things. Nothing profound, just notes, for comment if you will.

The Turning

On 29 September in Sunday Essay - the Turning, I reported on my reactions to seeing the film based on the Tim Winton book of short stories. I hadn't read the book at the time, but a friend gave me a copy following the film. I know Ramana ordered a copy at the same time and had since read it; at some stage I would be interested in his reaction.

I started reading the book and then put it aside. I was reading it from both a professional (how does he write? What can I learn?) and personal viewpoint. It was the second that made me put it aside. Finally, I picked it up and finished it. I am glad that I did, although my personal reactions remain the same.

Winton writes well. Reading the book as a whole, he creates a world through the interlinked short stories.You need a good memory to remember all the links, but the impressions build connections. And yet as I read, I thought that with few exceptions I wouldn't like to meet these people.

Actually, that's not quite fair. More, I felt sorry for them and a little depressed. Perhaps a fuller post later.

Swimming pool Registration

On 10 October in Septic tanks, swimming pools and the burden of compliance I took a very jaundiced view of the latest legislation in NSW on swimming pools.  A conversation today reminded me just how hard it was to stop the creep of Government regulation relating to social issues. People generally agree that it's wrong, but as soon as a specific example comes up. defenders abound.

The NSW population is around 7.3 million,  Each  year some six kids die from swimming pool accidents. When I pointed this out and the high costs involved with the new regulations, the comment was that it's not just the few deaths, it's also those kids who suffer brain damage from near drowning. But what about all the kids who no longer have access to inflatable pools with a depth greater than 30cms? What about all those who rent in public or private housing?

The new legislation exposes landlords to an additional legal risk. The simplest thing is actually to ban pools of all types. You would think that ridicule would control of of the sillier manifestations of this type of nanny state, but it doesn't work that way. The desire to avoid harm to a few imposes costs on the many. Where are the Libertarians when you want them? Off worrying about compulsory voting! 

Why the WA Election mess says positive things

In an earlier post, I referred to the mess in the WA Senate counting where 1,375 votes went missing between the first count and the the recount. Such a small number to force a probable new Senate election, but the vote was very tight. Of course its highly embarrassing for the Electoral Commission, but it's actually a very positive for Australian democracy. Why?

1. It has never happened before to my knowledge, even with a small packet of votes.
2. The Electoral Commission itself discovered the error and made it public.
3. Legal mechanisms exist to  resolve the issue,

The honesty of electoral organisations is central to democracy. They are the umpire. This case shows Australian democracy is sound at the organisational core.

I was going to write more, but time is out. Other thoughts come later.