Monday, June 30, 2014

Monday Morning Forum – whatever you like!

Feel free this Monday to go whatever direction you like. A few snippets first.

For those who follow twitter, the British Foreign Office is live time tweeting the cable traffic that began with the assassination of the Archduke.   This is an example of the material. Mr Jones was pretty accurate!


The Australian Government has released the interim report on the restructuring of the country’s welfare system. A six week consultation period has now begun. I haven’t had time to read the document properly. I do agree current welfare benefits need simplification.

On the Bank for International Settlements’ annual report:

In its annual report, the Swiss-based Bank for International Settlements (BIS) expressed serious concern that global share markets had reached new highs and the interest rate premium for many risky loans had fallen.

"Overall, it is hard to avoid the sense of a puzzling disconnect between the markets' buoyancy and underlying economic developments globally," the bank wrote.

The BIS says the disconnect is largely due to continued monetary stimulus in the form of money printing and record low interest rates by many developed economy central banks.

In the US, the latest GDP figures showed a contraction in the US economy. Economists do not appear too worried, attributing it in part to a harsh winter. I must admit that I am worried about the quantity of money sloshing around. A long time ago, I said that I could see no easy exit path for the US Fed’s quantitative easing. That remains my position.

The Commonwealth Bank of Australia’s troubles over its financial planning arm continues. I am not a great supporter of more regulation because of the costs. I do think that the CBA need to be held accountable.

In the Middle East, ISIL has apparently declared the establishment of a new caliphate. Meantime, Iraq has acquired some second hand jets from Russia, while trouble continues in the Ukraine.

Proper cheer up session, isn’t it?!

Still, down on the Amalfi Coast, the tourists will shortly be joined by eldest. Just back from Copenhagen, she flies out again in just under two weeks. Half her luck!


Post script

kvd does not like the topic. To explain his position, he provided a link to this contribution by the Boomtown Rats:

Sunday, June 29, 2014

Sunday Essay – objectivity and balance in the writing of history

Just at the moment, Al Jazeera is running a special series on Australia called Immigration Nation. It is, in fact, the SBS series of that name. This ran three years ago. I reported my reactions in a series of increasingly negative posts:

Seeing it again on Al Jazeera as an Al Jazeera  special, my heart sank. This time my reactions were far more negative, for this is broadcasting to the world. 

Here is an Australian response at the time from the other side of the fence in Australia, John Izzard’s piece in Quadrant, The Deceit of Immigration Nation. Izzard’s piece, too, is special pleading, but it is a corrective.

My second example of distorted history is a piece on ABC by Jennifer King and Lucy Sweeney, Archduke Franz Ferdinand: The man whose assassination is blamed for triggering World War I. Like the fArch Duke Franz Ferdinandirst example, it twists history to mould with current perceptions and biases. David Marr’s rather sneering piece in The Saturday Paper, The centenary of Archduke Ferdinand's assassination, is tarnished with the same brush.

Think that I am unfair here? Well, skim read both pieces, jot down the perceptions that you are left with and then compare that with the wikipedia entry on the Archduke.

I, too, grew up with the perception of the Austro-Hungarian Empire as something of a comic opera state, of Franz Ferdinand as something of a dull buffoon whose death triggered a war. They were the conventional Australian stereotypes of the time, although I had done enough history to know that the causes of the First World War lay in complex power rivalries, that the assassination itself was just a trigger. However, in a history world coloured by Australian and British perceptions, I actually knew very little of the complex history of the Austro-Hungarian Empire.

Put aside an excessive love of shooting. I now think of Franz Ferdinand as a brave if difficult man concerned to preserve the integrity of the Austro-Hungarian Empire by recognising ethnic and cultural differences in a pluralist state. I don’t think that I would have liked him, but I can respect his strengths.

And the Austro-Hungarian Empire? I can give you a simple measure here. Compare that Empire with post First World War European history to the present day. If the First World War was the war of the dynasties, we can characterise the subsequent history as the wars of ethnicities. The Austro-Hungarian Empire was a pluralist empire. Whatever its weaknesses, its management of ethnic difference, of the tensions that resulted, was far better than the ethnic slaughter that was to follow.

Franz Ferdinand’s constitutional vision may have been unachievable, but I am uncomfortable with sneering at a man who at least had a vision intended to accommodate difference while maintaining the integrity of the state.  

My point in these examples is not to attack the works in question  although I am doing that, but to use them as an entry point for a reflection on the way that this type of reporting affects my own writing when I am writing as a professional historian. Put simply, it twists it, moving it in new directions. Sometimes this is good, but it also risks introducing another set of distortions.

Take the White Australia Policy as an example. My disagreements with some current interpretations led me to research the policy, to try to understand the course of events. It also led me to focus on the experience of some non-European groups in New England and especially the Chinese. In doing so, I came across some of the exceptions in the application of the policy that John Izzard refers too. wing_hing_long_store001a

This is one example of the writing that followed, in this case recording something Janis Wilton had written: Family counts: glimpses of Chinese life in New England in the first half of the twentieth century. This piece from Talk’n Tours will give you a little of the history of the Tingha store displayed in the photo.

Now in writing this way, I am in fact doing something somewhat similar to John Izzard if for different reasons and in a different way. Izzard uses examples in an attempt to temper if not refute some of the views on the White Australia Policy expressed in Immigration Nation. Here he is playing a similar role to that adopted by Australian historian Keith Windschuttle in writing on Aboriginal history.

In focusing on the Chinese experience in New England I am also attacking some of the conventional stereotypes. I obviously have to explain the nineteenth century racial exclusion legislation and the impact that had on the Chinese community. That sets the scene for the adoption of the White Australia policy. In writing on the New England Chinese community in the twentieth century, I have to explain the impact on that community of the immigration restriction acts that came with the White Australia policy. However, and this is an important point, the Chinese experience did not suddenly end with Federation and White Australia. The Chinese were not passive victims, but found ways of working around and through the system.

I have no particular desire to get involved in current controversies on particular aspects of Australian history where those controversies are really driven in part by differing ideological positions. I am more interested in understanding what was. However, I am consciously trying to shift what I perceive to be particularly monochromatic views of Australian history that conceal the real diversity of past Australian life. That is the significance of the Chinese example, for the Chinese were more important in New England history than often realised, especially in the tin field areas, an importance that continued through the twentieth century.

My approach carries its own risk of bias, of course. If I allow myself to be too influenced by current discussions, I risk unbalancing my own work creating another bias. In a way, the weight of evidence provides its own correction. Then, too, I try to make clear the frame from which I am working. Still, a risk remains.

It is also true that the contrary views are actually quite important for the questions they make me ask. The result is, I think, a deeper historical experience for me and, hopefully, the reader. 

Saturday, June 28, 2014

Saturday Morning Musings – Florentine bankers with a dash of Palmer


Our blogging colleague AC is presently in Florence and seems to be enjoying herself enormously. This is a Wikipedia shot of the Palazzo Vecchio.

I didn’t like Florence as much as Venice or Rome;  it seemed over-hyped. That said, it is a fascinating place.

The Fairfax Press has just released the BRW Australian Rich 200 list. Gina Rinehart leads at a tad over $A20 billion. Then there is blue sky until the Pratt family kicks in at $A7.6 billion. I felt a little sad for Frank Lowy. He came in at fourth with just $A7.2 billion. Perhaps the new restructuring of Westfield fought through against strong opposition will help.

That was a magnificent segue because it allows me to go in so many directions. I must be disciplined! In a way, Florence was developed by the then equivalent of the BRW top 200. I have always liked the battles between the rival Strozzi and Medici families. Both made their initial money out of banking – Florence was at the centre of the invention of modern banking. Both used their money to gain political power. Both then built things. Palmer variant

The only Australian equivalent that I can think of is Clive Palmer. Well, that’s not quite accurate. Still, its the base for another segue. 

This image was apparently developed following a comment by skepticlawyer aka Helen Dale. It’s a play on the original slogan of the Australian Democrats (and here), keeping the bastards honest.

Views vary on Clive Palmer. Personally, I have fluctuated between thinking him a complete buffoon and then laughing out-right at something he said. He is, in fact, a very experienced political operator as well as a consummate showman. You will get a feel for this from Neil Whitfield’s post Shock and Gore and the weather in West Wollongong this morning. I would hardly have thought of Neil as a natural Palmer supporter, I am not saying he is, but he is clearly drawn in by the theatre of it all.

The Al and Clive show in Parliament House was one of the most effective pieces of political theatre that you will find. There was the suspense, the secrecy, drawing the media like flies. Then to find Clive and Al Gore standing together was so far from left field that it blew the media apart. It actually changed the political landscape.

However, beyond the theatrics there were two things that I found interesting.

One was the role played by veteran conservation campaigner Don Henry in stitching the whole thing together. This was quite clever, because it shifted the debate away from the messages that the Abbott Government had been trying to deliver.

The second was the apparent reaction of the new Palmer United Party party room. If the reporting is correct, they would not agree with their boss on the deal, throwing the whole plan into a degree of disarray; changes had to be made to allow the show to proceed. This is quite important, for it suggests that the new parliamentarians, and they are all new, are not mere ciphers. They never would be of course, Parliament doesn’t work that way. Still, now they face the challenge of developing coherence as a group. 

Well, the day has dawned. I had other things that I wanted to say, but it is time to move on. 


Cousin Sophie’s take on the Palmer matter in The Saturday Paper

Postscript 2

This second postscript has nothing to do with the main theme in this post. I record it simply as  remarkably bad example of “popular” history. Archduke Franz Ferdinand: The man whose assassination is blamed for triggering World War I.

Thursday, June 26, 2014

The lingering effects of James Busby, founder of the Australian wine industry, on Australian life


James Busby (and here) was a remarkable man.

In New Zealand, he is remembered for the Treaty of Waitangi. You can see why that might be important. It’s a fundamental constitutional document that is central to today’s New Zealand. In Australia, he is remembered as the founder of the Australian wine industry.

James Busby was born in Edinburgh (Scotland) on 7 February 1801. He was twenty two when the family set sail on the Triton for Australia  where father John Busby, a surveyor and civil engineer, was to take up a position responsible for “the management of the Coal Mines, in supplying the Town of Sydney with water, and in objects of a similar nature'. In this role, he was responsible for the creation of Sydney’s first permanent water supply.  

The Busby's arrived in Sydney in February 1824. James had previously studied viticulture in France and had written A Treatise on the Culture of the Vine and the Art of Making Wine, which was published in Sydney in 1825.This was followed in 1830 by A Manual of Plain Directions for Planting and Cultivating Vineyards and for Making Wine in New South Wales.  

Initially James was employed at the Male Orphan School near Liverpool where  he was to take charge of the school farm and teach viticulture. He lost this position when the orphan school came under the control of the trustees of the Church and School Corporation in 1827. He was not happy with the way he had had been treated or subsequent offers, leading him to sail for England in 1831 to protest his work treatment.

On 19 February 1831, James Busby sailed for England in part to protest his work treatment. Viticulture was still a core interest. In September 1831 he began a four-month tour of Spanish and French vineyards, which resulted in two further publications: Journal of a Tour Through Some of the Vineyards of Spain and France (Sydney, 1833); and Journal of a Recent Visit to the Principal Vineyards of Spain and France (London, 1834).

James arrived back in Sydney on 16 October 1832, along with a large collection of vine clippings. In March 1832, he had been appointed British Resident in New Zealand. On 1 November he married Agnes Dow of Segenhoe in the Hunter, embarking for New Zealand in HMS. Imogene on 21 April 1833. He now effectively departs from the Australian story, becoming part of New Zealand history. However, his impact on Australian life continued.

At this point, we have a confusion of dates in the main secondary sources. Either John or James Busby was given a grant of 2000 acres in the Hunter that was named Kirkton. Management of the property was taken by William Kelman. Kelman had come out on the same ship as the Busby’s and had married John Busby’s daughter Katherine. The vines that James Busby had brought back were planted in the Sydney Botanical Garden and at Kirkton. From Kirkton, the vines spread across Southern Australia. Fittingly, William Kelman inherited the property after John Busby’s death.

Like many modern Australians with their love of the life styles of France and Tuscany, James Busby, too, fell in love with aspects of that life style and especially the wine. He wrote, I’m sorry, but I have not been able to find the reference again, that if Australia had been settled by the French you would find the farmer at the end of the day sitting outside sipping his own wine, perhaps under the shade of the vines.

An idyllic picture, but perhaps not as far removed from modern Australia as James Busby might have expected. The inheritance of those Kirkton vines lives on.   

Tuesday, June 24, 2014

The Peter Greste case

There is a real sense of outrage in Australia over the sentencing of Peter Greste and his Al Jazeera colleagues. Foreign Minister Julie Bishop had this to say:

"The Australian government is shocked at the verdict in the Peter Greste case. We are deeply dismayed by the fact that a sentence as been imposed. We are appalled by the severity of it.

"It is hard to credit that court in this case could have reached this conclusion.

"The Australian government simply can not understand it based on the evidence presented in this case.

"Peter Greste is a respected Australian journalist, he was not there to support the Muslim brotherhood

"We respect the outcome of the recent elections in Egypt and will now initiate contact at the highest levels in the new Egyptian government to see whether we can gain some kind of intervention from the new government.

"I have spoken at length with Peter Greste’s parents. They are considering their legal options, including appeal options.

"We do not know how long an appeal process will take, but in the meantime, we will provide whatever consular assistance we can.

"We understand there have been some very difficult times and there has been a great deal of turmoil in Egypt. But this kind of verdict does nothing for Egypt’s claim to be transitioning to democracy.

"The Australia government urges Egypt to reflect on what message is being sent to the world.

"We are deeply concerned that this verdict is part of a broader attempt to muzzle the press freedom that upholds democracies around the world.

"I can not think what more we could have done. I am bitterly disappointed by the outcome."

Foreign Minister Bishops’ remarks were supported by all sections of Australian politics.

In other reported reaction, the Netherlands and the UK said they would summon the Egyptian ambassador over the sentencing. The Dutch foreign ministry said that the "minimum requirements for a fair trial were not met".

"I am appalled by the guilty verdicts handed down today against Egyptian and international journalists in Egypt," the UK foreign secretary, William Hague, said in a statement.

"I am particularly concerned by unacceptable procedural shortcomings during the trial process, including that key prosecution evidence was not made available to the defence team."

The Canadian ambassador David Drake, who attended the session for Fahmy, an Egyptian-Canadian, said there were many questions over the verdict.

"We are very disappointed," he said. "We are digesting this ... We don't understand this particular verdict.''

As you might expect, the twitter feeds ran hot with reactions from fellow reporters when the news first came out -  #petergreste and #freeajstaff provide examples. As one twitterer observed with a particularly Australian take, even kangaroos would be embarrassed by this result. The BBC provides an analysis of the hash tag traffic to this point.

The Egyptian Government has attempted to defend the decision:

“Egypt has strongly rejected foreign criticism of its judicial system and interference in its affairs after a court decision to sentence three al Jazeera journalists to seven years or more in jail raised an international outcry.

"The Egyptian foreign ministry strongly rejects any comment from a foreign party that casts doubt on the independence of the Egyptian judiciary and the justice of its verdicts," the foreign ministry said in a statement.”

I suppose that one could argue that there have been other travesties in show trials here and elsewhere, as well as other oppression of the press; this is a much retweeted example: “Rastakhiz@sedaye_iran I don't hear this much #FreeAJStaff outrage against #Iran regime which has made Iran into the biggest prison for journalists in the world.”  That said, it remains true when you strike at journalists in this way you are striking at the heart of an institution that we rely on the provide at least some protection against tyranny.

Monday, June 23, 2014

Monday Forum – disruptions & conundrums 1

I am, I fear,  a very confused person. Today’s forum demonstrates that! Feel free to roam in whatever direction you wish as a consequence!

Disruptive Innovation

Comments on Rear Vision - The Market for Higher Education, drew us into the current debate started by Jill Lepore in the New Yorker. These pieces will give you a feel:

In a comment, Winton wrote:

It seems to me that it is futile to attempt to argue that any particular business model is best under all circumstances. In some circumstances disruptive innovation is desirable. In other circumstances continuous improvement is desirable. In some circumstances there may even be virtue in going back to the old ways of doing things.

In a sense, that was part of my point. You can’t, but people do just that and at a cost.

How do we stop the blind application of models regardless?

Mr Abbott (and Winton’s) Bravery

In a post, How can desirable economic reforms be pursued more effectively in Australia?, Winton came to a partial defence of the Howard/Hockey budget. He said in part

Perhaps I should apologize to Tony Abbott and Joe Hockey. The government has made some tough decisions in its first budget. I don't endorse everything they have proposed, but it is good to see a government proposing action to deal with a looming problem before a more painful adjustment becomes unavoidable.

So just following up on Winton, what were the good features of this budget?

Education for National Efficiency

The second half of the nineteenth century saw significant expansion in technical and adult education, driven in part by the ideal that such education provided a vehicle through which ordinary working people could advance themselves. In a way, the Scottish/American philanthropist Andrew Carnegie exemplified this trend. Born in 1835, Carnegie was a self-made man who built a huge industrial empire.  In  1901 he sold his steel company to J P Morgan and devoted the remainder of his life (he died in 1919) to large-scale philanthropy, with special emphasis on local libraries, world peace, education and scientific research.

Carnegie believed passionately in the power of education for the ordinary man and in self-help. His interview with Napoleon Hill forms the basis of How to Raise Your Own Salary, one of the early and still very popular self-help books,

In his philanthropic work, Carnegie focused on building infrastructure and especially public libraries. His work continued after his death. In New South Wales, for example, the creation of the public library system during the 1930s was facilitated by Carnegie support.

Just as Carnegie was launching his philanthropic work, a new trend in technical education was reaching a peak. This was education for national efficiency. Driven by European power rivalries and especially the rising power of Germany, this was education and especially technical education for national economic and political power, a vey different concept from education for individual advancement. It had profound effects.

Which to your mind is more important, education in the service of the state for national efficiency or education for individual advancement?

The New Zealand Model

Back in 2006, in Changes in Public Administration - the New Zealand Model, I looked at the flowering of a particular approach. When these ideas first emerged, I was attracted to them and studied them, visiting NZ on multiple occasions.  I can still their relevance, although I feel that they have been misappropriated. Is the NZ model still relevant? Why?

I was going to give further examples to encourage discussion, but that’s enough for a start. 


Winton referred to this speech by Minister Pyne. Address to the Committee for Economic Development of Australia (CEDA), 16 May 2014, Adelaide. I have added it to extend the discussion.

Friday, June 20, 2014

Train reading – Edith Potter’s The Scone I Remember

My background reading at the moment is solidly entrenched in the Hunter Valley. Reading intensely on a particular area, even one I know reasonably well, is always informative because of the linkages it establishes in my mind.

Once a mental pattern is established, new information challenges, deepens, shifts the pattern. Something that would have seemed dry or even trivial becomes meaningful. “Wait a minute”, I say to myself, “that’s a nice example.”  Alternatively, I say to myself “That can’t be right. It doesn’t fit!”  Then, sometimes, something that is apparently local or personal or family will take me in a new direction far removed from that locale or even time as I seek to understand. Scone-NSW-Anglican

My present train reading, Edith Potter’s  The Scone I Remember (Scone and Upper Hunter Historical Society, Scone, 1981) is a case in point.

Scone is a town in the Hunter Valley.  It’s not a big place, but one with a considerable history. The photo shows Scone’s St Luke’s Anglican Church.

Edith Potter’s recollections cover her younger life in Scone in the period leading up to and including the First World War. Her family, the Hulins, came to the area in the middle of the nineteenth century.

The book is packed with detail, you could walk the streets of of old Scone with it in hand. It is loaded with names, I think that Edith tried to include every name she could!, to the point that they blur. It is a very polite book. Yet it’s also a very good book in part because of all that detail.

When I first started to read the book I got a little lost in the names, although even then there were patches of recollections expressed in a writing that sucked me in. As the book progressed, the detail became important. The names of the main stores are just that, names, although I knew some. The detail of their physical location will mean little to someone who does not know or is not interested in Scone. However, the descriptions of the stores and the life that revolved around those stores is interesting.

More broadly, in describing the detail of daily life Edith provides real texture. Take women’s clothing, those complex long dresses that were fashionable at the end of the nineteenth century. Edith describes not just them, but the whole paraphernalia from undergarments up, the fabric, look and feel. She describes the detail of the ceremonies and sometimes tragedies of life as expressed in one place at the one time and especially among one group. The laying out of the bodies in a formal sense, the procedures for saying farewell.

I said that books like Edith’s took me in new directions. In my case, it’s my next two History Revisited Express columns looking at changes in women’s life over the last century and a half. My conclusion is not quite what you might expect. The grand fights of the women’s movements in the last half of the twentieth century were second order issues. They were major changes, but they could not have occurred without earlier changes.

For some reason, bobbed hair has become my mental symbol of the fundamental change that took place. The trigger for this is a simple one. Edith describes the pain that could result from the combination of long hair with long high necked dresses with multiple small button holes stretching up the back. The hair became entangled with the buttons; getting undressed could be painful. In the end. you might just have to cut the entangled hair.

I well remember the problems I had in getting knots out of my daughters’ hair as I brushed it, They would wriggle: “Daddy, you are hurting me!” So I could empathise with Edith’s predicament.

I will return to this theme once I have finished my columns. In the meantime, I will finish reading Edith’s book with great pleasure. Maybe, later, I will tell you a little more about Scone. There are stories there that have a modern resonance that you may find surprising.       

Monday, June 16, 2014

Rear Vision - The Market for Higher Education

ABC Radio National’s Rear Vision series has just run a useful documentary on the market for education  especially in the US. You can listen to the program here. I do not know if is available to people outside Australia.

I mention it because of the recent discussion threads here linked to Minister Pyne’s proposals, the economics of education, the structuring of Government funding (if any) that should be provided to support education and especially higher education and, if so, how.

If you can access it, I think that it’s worth a listen. 


Another story from this morning that I wanted simply to record at this  time: Working age Australians have become far less reliant on welfare payments, new figures show.

Postscript 2

kvd found this piece by Jill Lepore in the New Yorker: THE DISRUPTION MACHINE. It makes for depressing reading, at least for me. Over thirty years in senior management or as an adviser to management, I have seen so many management fashions. Some I have supported, others made me cautious because they seemed just too simplistic, too partial. I find it ironic now that a fair bit of my professional or semi-professional writing attempts to address the continuing dead hand of things I once supported!

Postscript 3

Evan pointed me to this response by Professor Clayton Christensen to the Lepore piece: Clayton Christensen Responds to New Yorker Takedown of 'Disruptive Innovation'’


Sunday, June 15, 2014

Sunday snippets – a crazy sporting day, a new Australian carbon date and the tyranny of 500 words

Yesterday was certainly a sporting day, with three Australian teams playing internationals in three sports in three countries! Crazy, really. It began in the morning Australian time with the world cup soccer match against Chile in Brazil. It was an exciting match in which Australia actually did better than expected, going down 3-1.

In the evening, Australia played France in the rugby, grinding out a 6-0 victory at the Docklands Stadium in Melbourne.  It wasn’t exciting rugby, too many kicks, while the application of the scrum rules seemed to slow the game down. The most exciting phase came right at the end when the French, threw everything at the Australian line in a desperate bid for a converted try to that give them a win.

Then at 11pm eastern time came the finals of the Hockey Women’s World in the Netherlands. While I knew that it was on, I hadn’t realised that it was going to be broadcast until kvd alerted me to the possibility.

The Dutch had cruised through the tournament, including an earlier 2-0 defeat of Australia during the qualifying rounds. The Orange showed their class from the start of the game, rattling the Australian side. This photo from the Official Hockey World Cup site shows Australian goal keeper Lynch in desperate defence. In bringing the Dutch player down, Lynch incurred a penalty that led to the first Dutch goal.  After that initial period when the Dutch scored twice, sound familiar?, the Australian side settled down and managed to hold the Orange girls.  Lynch played an absolute blinder of a match, helping keep the Australians in the game.


Changing tracks entirely, across in Western Australia preliminary dating results from an archeological dig at the Ganga Maya Cave in the Pilbara suggest that the site may have been first occupied more than 45,000 years ago and then used from time to time up until about 1,700 years ago. The site therefore joins other older first occupation sites:

  • Devil’s Lair: Limestone cave south-west Western Australia – 41-46,000 years old
  • Lake Mungo: Dry lake basin, Willandra Billabong Creek, western NSW 43,000
  • Nauwalabila: Rock shelter Arnhem Land 200 kms East of Darwin – 40,000
  • Malakunanja: Rock shelter 45 kms north of above, east of Darwin – 45,000

The long period of human occupation of the Australian continent spans massive climatic and sea level changes. My personal historical interest remains focussed on Northern New South Wales. There we know that about 5,000 years ago the area, like other parts of Australia, went through a period of technological change and population expansion that has come to be called intensification. But what happened before that? What happened during the cold mini-ice age?

The oldest confirmed nearby site that I am aware of is in Southern Queensland, dating from around 22,000 years ago. We simply don’t know what happened in Northern NSW, although it seems possible that human occupation (if it were there) ceased on the cold dry sub-glacial New England Tablelands. Part of my difficulty is that, to make reasonable guesses, you have to understand the likely pattern of the past climatic and sea-level change at local or regional level. If you know that, you can at least develop reasonable hypotheses, I don’t, not at level of detail required. Sigh.

Moving North, the Australian Government has released its Green Paper on the development of Northern Australia. Not unexpectedly, the Australian Conservation Foundation’s take on the whole thing is quite negative. I have yet to read the paper. 

Finally in these short  Sunday Snippets, interesting discussion on ABC Radio National on the changing length of news pieces, I can’t give you the link because I heard it in passing and don’t even remember the program, It appears that 500 words is now the desirable maximum. As it happens, the required maximum word length of my weekly history column is just that, 500 words, so my attention was caught.  

The point of the piece is that 500 words is not a lot in which to provide a full report. There is a very special discipline required in compressing detail to that length while keeping it interesting and factual. It requires careful selection of the words and facts to be included.

In my case, I can see the paper’s point. The column is there to interest, to attract readers to the Wednesday magazine section of the paper. The paper adds a photo and headline plus, depending on the story, another photo, featured quote or some other subheading. My column is generally the only content on the page, the support for the advertising; the actual space occupied varies depending on the advertising mix. The  subeditors rarely change my wording beyond sometimes compression. Their skills lie in presentation. Generally, not always, they do a pretty good job.

I hadn’t actually realised the extent to which my column supports a page until I came to write this piece, looking back over the last dozen columns or so. The same pattern holds for other featured columnists. The feedback I get on the columns from the paper itself and readers suggests that the column is reasonably popular, especially among older readers and longer term residents. You would expect that demographic, given the history focus.

The columns aren’t on the on-line. For that reason, I publish them on my history blog with a lag. You will find the 2014 series here. The blog version is far less pretty, in part because I don’t always have access to the same photos, in part because of layout constraints.

Returning to my main theme, I know from experience just how hard it is to compress a story to 500 words, especially when you have to write stories week in week out. So much is lost. I get around it to a degree by writing series, although that’s complicated because I know that many who might read simply won’t have read the previous piece or pieces. But in news reporting, 500 words on a topic is sometimes all you will get.

For a news junky like me, that’s very dissatisfying!     

Saturday, June 14, 2014

Saturday morning musings – musings on Australia’s changing society

This weekend, youngest has a stand at Supernova. For those who don’t know it, it is a pulp culture exhibition. This is youngest’s brandFlame Bird

This photo shows them setting up for the combined Flame Bird and Sydney Comic Guild Supernova stands.Supernova setting up

I have followed my daughters’ journeys with love, interest andFire sword great admiration. They inspire me.

This is a picture of youngest in an earlier mode. Note the continuing fire theme. 

We are all influenced by our experiences and those of whom we love the most.

Most young people really, really, don’t want to be stuck on the dole, what is now called the newstart allowance. It sucks on just so many different levels.

If that’s your only income, if you have no back-up from family or friends, you can’t live on it except in poverty. You have to comply with increasingly onerous rules. The income limits, the way that your allowance drops if you earn, actually rules out getting that extra bit of cash that you might need to increase your income, to get that piece of clothing that you need for an interview or just to take a break, to go away.

Rent is the most difficult thing, followed by utilities and then travel costs. If you are already in the welfare sector, if you live in social housing and have subsidised rent, then it’s a little easier to live if harder to break out of the poverty trap. Why harder? There is a big difference between market rent and a rent capped at 20 to 30% of whatever income you haveHelen copenhagen

The aspirations of young people, all people, vary. This is  a photo of eldest in Copenhagen. She is there on business, a trip that she earned because of her value to the company. She is focused, organised, in a way that leaves me somewhat in awe.

Two girls, two very different personalities with different aspirations and interests. Both are strong women. Neither displays any aspects of what Treasurer Hockey would call a belief in entitlements, nor (for that matter) do their friends. If anything, I would say that neither has any trust in the state or the benefits offered by the state.

Both have received benefits, the HELP or HECS scheme, the youth allowance or newstart. Both have navigated their way though the myriads rules involved. They have tried to work out the practical issues of how to comply with the rules while gaining the extra income they need to survive. Both have had family and friends that they could rely on.the coach 8, Heffron 19 June 10

This next photo from a few years ago shows eldest with her netball team.She enjoys netball and kids, loves coaching. It also gave her a little extra cash.

In our modern world, friends and, more broadly, networks are very important. It determines who gets a job, what support you have when things go wrong.

I am not talking big picture stuff here, just the opposite. All young people today need part time work, they need back-up if things go wrong. This is where who you know, what you do, what you have done, becomes critical. Will your housemates carry you if you can’t find rent? Where can you turn to if you lose your accommodation? Who can give you the next job?

Those kids who do not have the right networks, who live in the wrong area, who mix with the wrong groups, are in trouble. Sometimes its a personality issue, more often a lack of opportunity. I grew up in a world of very low unemployment. of abundant opportunities. That world has gone now, The broad scope of opportunities has exploded, while immediate opportunities have declined, become more selective, more restrictive.

The same problem is emerging at the opposite end of the age spectrum. Those on old style super retire as soon as they can. Indeed, they often have too to maximise their benefits. Those with accumulated assets can retire. The rest have to manage as best they can.

Here there is a disconnect between the political dialogue and on-ground reality. The political dialogue says that we must keep older people in the workforce to overcome the problem of aging, The on-ground reality is that a large number of older people who want to work can’t. There aren’t the jobs.

Some things have improved, The abolition of compulsory retirement, the partial enforcement of laws against ageism, have allowed more people to continue working well past 65. Mind you, this has it’s own problems, for it also blocks out younger workers.

There is another problem in our more fragmented society. We are now dealing with the affects of earlier marriage break-ups. This one is complicated. However, the bottom line appears to be an increasing number of people and especially women who no longer have either the assets or the networks to provide  the most basic support they need.      

Friday, June 13, 2014

Education is more than economics or national efficiency

I had a part completed post yesterday on the international scene. I put it aside in part because I have a tooth abscess and find concentration difficult, more because I found the scene depressing, requiring too much research to say something sensible.

Today instead, a brief continuation of the discussion that began on Sunday Essay – John Roskam and the value of an Arts degree. There Thomas wrote in a comment:

When studying my Arts degree (part of the double B.Education/B.Arts), there was quite a high number of mature age students. Not something ridiculous, like 50%. But certainly something around the 30% range.

Of this, I'd say half were people looking for a 'sea change' so to speak.

The other half were people WELL outside of the working age and were engaging in pure learning. Not for any other purpose than to learn more about the world.

This has to be the noblest form of education aside from learning to help others.

I agree with previous commenters that the Arts degree is largely misunderstood (and, to a degree, mismanaged by universities). It's obviously not reverse welfare. For the majority of people, it's a way to achieve an end - whether it's a teaching focus (as with me), a chance for existing workers to up-skill so to speak, or a chance just to learn. And that's to say nothing of the students who enter Arts degrees from high school (quite a number of students do it every year) because they just want to get into uni and don't know what they want to do and/or genuinely want to learn.

I'll finish with this: I believe it's quite short-sighted to wholesale criticise a degree, graduates, or the like without actually even ATTEMPTING to understand them (the degrees and the graduates) - and this is what comes through from Roskam's piece.

I thought that Thomas’s comments drew out a number of issues, including the variety in students and student needs. Arguably, the co-related concepts of educational for national efficiency, education for personal and national economic return, education for job purposes are swamping all other considerations. The idea that a key purpose of education is to help individuals live richer and more fulfilling lives, to pursue their own intellectual interests, to just enjoy doing or making things, to use their education for public purposes that may not provide an immediate cash return, has been lost sight of.

I think that’s a pity. It risks impoverishing our society, possibly leaving us with more economic wealth but with a diminished sprit.      

Wednesday, June 11, 2014

Political and economic straws

Mixed news round-up today.

In the Canberra Times, Michael Green analyses the health changes, while in a related story Dan Harrison comments on the bulk billing numbers. In another piece, David Gadiel and Jeremy Sammut (Public hospitals aren't 'free': so charge an accommodation fee) take a different perspective.

The National Party rebellion against Mr Abbott’s  paid parental leave scheme continues (Paid leave: Figures reveal city-rural gap). The Nats have a real problem. Economic and demographic change means that the electorates they represent are especially affected by some of the budget changes. Eighteen pilot areas have been selected for the work for the dole scheme, They cover the entire North Coast of NSW, including the seat (Cowper) of the Nationals’ Assistant Minister for Employment Luke Hartsuyker.

This is an analytical, not political comment. I think the electoral dynamics are going to be interesting to watch.

Pacific Brands has announced another profit downgrade, blaming it on the combination of the unseasonally warm weather with budget created uncertainties. It is one of a series of retail profit downgrades. I think that consumer confidence has been affected, that comes through from the consumer sentiment surveys, although the latest business sentiment results were stable after a previous fall. The data coming through does suggest a weakening economy, although you have to be careful in interpreting it all. 

Time to begin the day.  

Tuesday, June 10, 2014

Just a hockey shot

Some mornings I can’t get motivated. I really can’t. I have browsed the news. The Australian PM is trying to set up a coalition of right wing leaders to oppose action on climate change. Nahh. No good. Can’t be bothered. There is more trouble in Brazil in advance of the soccer World Cup. Nahh.  In fact, after an hour just reading, I remain uninspired. I need to go and prepare for the day.

In the meantime, just a hockey action shot. No, I didn’t take it. I rarely get shots as good as this. That’s youngest in goal. To her left (right in the photo) is Em. Her dad and I have been watching our girls play for several years, so we know each other quite well.

Out of sight on the left, the other team has just taken a corner. The girls are rushing to defend. Enjoy. Clare hockey

Monday, June 09, 2014

Rainbows, commenters and stray cats

I was deliberately provocative in Sunday Essay – John Roskam and the value of an Arts degree. At the end of the post, I asked

Mr Roskam’s problem, as I see it, lies in the need of the political theorist to simplify, to ensure that things fit within his model. Marxism had similar problems, As I said, I thought that it was a remarkably silly piece.  I stand to be corrected in debate. Am I wrong?

Winton Bates came in with the shortest comment on record: yes!

The following photo comes from kvd. Triggered by an exchange in comments, it shows black and white lambs. I like lambs. They are funny affectionate creatures. Then they grow up to become sheep, arguably the most stupid of animals! black & white lambs

I really like my commenters. They keep me honest and make me extend my thinking.  You a get a feel for that from just how often I end up adding postscripts to posts triggered by comments. This next photo comes from kvd as well. It is a very Australian scene. How many of us are waiting for the pot of gold at the end of the rainbow?rainbows-big

I am fortunate with my commenters in that they span views. That’s very important and something I consciously try to encourage. If discussion is dominated by one view, you may refine that view but you don’t get new views.

This week I am putting economics, politics and public policy aside. This is a New England and history week. I am behind in my major projects.

By the way, Scrawny (Stray cats, cruelty, civil aviation and my Hunter Valley trip) is doing quite well. He/she, I’m still not sure which, has put on weight. Scrawny remains resolutely independent. I think Scrawny is being fed by other people now as well, for visits to me have become less regular. Days will pass without sightings and then there is a miaow at the gate when I go out. We chat, I provide food, and then go on my way.


This is kvd’s comment. I bring it into the main post without comment, although my thoughts are with him on this day.      

“Since you have done me the honour of publishing two of my favourite photos, and since today is my 42nd wedding anniversary (although my wife unfortunately died some years ago) I want to treat this as an 'open post' - one in which you might find thoughts of all things; interesting and personal.

The following is from the writings of one of my lovely clients, recording her trip back 'home' to an Africa now long gone. I must say, it moved me to tears...

I tell Brian I wish to scatter my parents ashes in the Zambezi River, will he help me find a special spot, and ask if he would be willing to sing a song of farewell in Nyanja. I’m surprised at how readily he agrees. Africans honour death. Then he asks me, what are their names? Tom and Vera, I say. He rolls their names around his African tongue, till he gets it right. Ah, Tom and Vera, he says.

Back at the tent, I unpack their ashes, and spoon from two bags marked ‘Mom’ and ‘Dad’ into two smaller ones. I still have Victoria Falls, Table Mountain, the Atlantic Ocean, and Kimberley to go, but there is plenty here.

Then I lick the spoon.

A few hours later, with my bag packed with two small zip lock bags of my parents ashes, and their rosaries, we head out for a sundowner cruise, gliding through rocks and water, the sun is setting, we walk amongst white sand and trees and bushes, we listen to Brian speak of the land and the animals and soak up the bush. We are looking for a special spot for the Ceremony of the Ashes, and Brian points out a couple he thinks would be suitable. No, not right for me. He points out the oldest tree on the Zambezi river ‘eighty years and more’, a gnarled grey tree of wide girth, which splits into two, at waist height standing joined, yet apart, and I think of Kahil Gibran’s poem. There, I say. He cuts the motor, we drift, and he says with some theatre, ‘This is the bridge between the rising sun in the east and the sun setting in the west, both can be seen from this spot. Over there is a beach, watching this fine tree, and beneath this fine tree is another beach for resting upon. This is a good place.’ If you think this is made up, I want to assure you that this is exactly how precisely he spoke, how many Africans speak. Where did this amazingly moving dialogue come from? Another cynical soul may miss this altogether.

Suddenly, he starts to sing a song in Nyanja. A song he described to me later, and writes out the words, which means something like ‘You have left me in darkness, I am lost, and I remember you’. I film him. The melody is sweet and he sings softly, he stops suddenly, and buries his face in his hands. I wait respectfully. He lifts his tear stained face in embarrassment and implores Gerald, ‘Please forgive me for crying Sir’. Gerald mumbles ineffectually. I scramble over the wooden seating and grab his hands, offering tissues, he holds on tight, tells me this is the same song he sang at both of his parents funerals, and the memory pains him. Then he lifts his head, and sings it again, verse by verse, unwavering, his voice strong and proud. I am crying, but he is not. I wish I knew the words.

And also, today of all days, I'd like to acknowledge my young brother-in-law's life:
- of whom his family past, and present, is quietly proud.

Thanks Jim - I am unconcernedly off-topic, as always :)

Sunday, June 08, 2014

Sunday Essay – John Roskam and the value of an Arts degree

I do not know John Roskam. I have never met him. He has been, and I quote from his bio, “Executive Director of the free market think tank the Institute of Public Affairs since 2004. Before joining the IPA he taught political theory at the University of Melbourne.”

On 6 June, he wrote a remarkably silly  piece in the Australian Financial Review entitled Taxpayers Shouldn't Fund Arts Degrees. That’s not quite the title that appears in the Review, this appears to be “Arts degrees are welfare in reverse”,  but I’m assuming the article is the same. It is, I suppose, the type of cant that I would expect from a political theorist of left or right. In saying that, I accept that the piece was meant to be provocative. 

In responding, I want to focus on one thing, my own experience as a recruiter. What do I expect from someone with an Arts degree?

Most importantly, I expect them to be literate and articulate. Obviously I test that, You can no longer assume that anybody with a degree has either quality. In a world of mass education and short knowledge tests where most kids have to work while studying, literacy in particular can no longer be assumed. Writing, the capacity to write, remains important. If you can’t write, if you can’t express yourself, then there is a problem. 

Next, I expect them to be able to talk about something that they have studied. I don’t care whether it’s Pope, Wright or Cicero, philosophy or history or English literature. The point is what have they learned, how have they approached it.  Do they have the learning skills to address themselves to the job that I want them to do?

Then I look for curiosity, the capacity to think outside the box. I would expect this from Arts graduates, although the best in all fields of study will have the same characteristics.

My comments to this point have focused focused on Arts as a broad, generalist qualification. Obviously, if you want someone with specialist skills for a particular field such as law or accountancy you will focus in that area. With law firms, a key question is the capacity of the person to generate immediate billable hours. if  I give you the work, can you do it? However, beyond that point the type of skills and abilities one expects of an Arts graduate are still important.

Law firms depend on their rain makers, the people who bring in the work. They depend, too, on the ability of their people to find new solutions to legal problems. This requires a capacity to think. I don’t think that it’s a coincidence that the first double degrees in Australia were in Arts/Law. Both field require different disciplines. The power lies in the combination.

Mr Roskam’s problem, as I see it, lies in the need of the political theorist to simplify, to ensure that things fit within his model. Marxism had similar problems, As I said, I thought that it was a remarkably silly piece.  I stand to be corrected in debate. Am I wrong?           

Saturday, June 07, 2014

Saturday Morning Musings – the rise of rules based societies

Ron butchering sheep, Glenroy

This photo is dedicated to kvd. It shows an old ewe being butchered for house meat on Glenroy. To understand the background, you need to look at the comment thread on Australia’s weakening economy.

I haven’t said anything on climate change for a while. Really, the debate  now is almost theological in its intensity. I have had nothing to add. Still, here are two contributions that I think worth reading.

Back in February on Stubborn Mule, James Glover’s Bringing Harmony to the Global Warming Debate used simple statistical techniques to test the significance of the claims and counter claims about the number of record heat days. His analysis suggest that in statistical terms, the probabilities are in favour of recent warming. On the other side of the ledger, Don Aitkin’s A short summary of the supposed ‘consensus’ provides a useful overview challenging the constant use of apparent scientific consensus to justify a pro-climate change position.

My lay view remains that the probability is that temperatures are increasing and that human activity plays some part in that. In political terms, the consensus view that climate change is happening and is important remains globally dominant. This creates a divergence between the stances adopted by the current Australian Government and the evolving global position, a divergence that will create difficulties for the Government.

Again speaking personally, I wish the Abbott Government had not locked itself into the abolition of the carbon tax as opposed to modifications to the scheme. If, as seems likely, some global pricing mechanism emerges as a way of reducing carbon emissions, then the architecture would already have been in place. Instead, we have an expensive direct action program of dubious worth. We would have been better off with a  a pricing mechanism set at low levels that could be increased if necessary while saving at least some of the money connected with direct action.

That’s water under the bridge now. I accept that the current Australian Government has stated its position and campaigned on that position. Meantime, we are dealing with the legacies of previous direct action policies that are now distorting the operations of the economy in perverse ways. Feeder payments on solar energy is an example.

Staying with Stubborn Mule and Don Aitkin, in Government spending, Stubborn Mule looks at the relationship between the level of government spending and GDP growth in developed countries. He finds no statistically significant correlation across developed countries between economic performance and the relative size of Government spend. In On corruption, Don reflects on the apparent decline in civil morality in Australia.

I don’t agree with Don’s interpretation of the Pink Batts matter. I reflected on that and associated issues in Saturday Morning Musings – public administration, dashboards and pink batts. However, I do worry about just what the current NSW ICAC inquiries are saying about the apparent decline in civil morality within the Liberal and Labour Parties.

The difficulty is that Australia today is very much like India in the decades after independence. There are rules for everything and everything has its rule or rules. As rule breaches mount, new rules are introduced to counter the breaches.  Rule based approaches reflect a lack of trust. The citizenry cannot be trusted to try to do the right thing. It must be told what to do and then punished for non-compliance. This imposes economic and social costs. Today, everybody is a law breaker to a greater or lesser extent.

NSW recently introduced a law making it an offence to cross a road against a do not walk sign. You must observe the prohibition or be fined. On my journeys too and from Parramatta, there are two crossings where this rule is breached every day by many people, me included. Why? The pattern of lights and traffic are such that there are circumstances where it is safe to walk against the do not walk sign. Indeed, it can be safer to walk then than when the walk sign shows because there is less chance of being skittled by a driver running the lights.

The NSW Police have conducted blitzes to enforce the new rules. These have been very lucrative so far as the NSW Government is concerned. One blitz and you have funded the salaries of the police involved for several weeks. Think of it as a cost recovery exercise. In practice, the police ignore the rule beyond blatant breaches. Why? They have more important rules to enforce. They can’t enforce them all all the time. They have to set priorities and exercise discretion.

This has always been the case and especially in the country where the police live in and are an integral part of the community. So and so has been drunk and disorderly but is not a bad chap. He just does that from time to time. He doesn’t hurt anyone. Ignore the offence and send him home to sober up. This type of personal judgement can create problems; rules have been introduced to stop it; Magistrates pontificate, they lecture, they impose punishments; the most impressive buildings now in many country towns are not post offices or banks or churches, but police stations and court houses.

The solution to over-rules is to reduce the number of rules, to simplify. That’s central to the Australian Government’s campaign to reduce red tape. Yet that campaign focuses on economic restrictions, freeing that thing called the economy. It does not address the broader question of over-regulation, of too many rules. The Abbott Government is, in fact, just as command and control, just as rule based as its predecessors. Consider, as an example, the new rules relating to the Newstart Allowance.

Finishing with New South Wales, if we did not have public funding of elections nor the restrictions on political donations, we would not have had the ICAC inquires into the breaches in electoral funding laws. There would have been no offence, no corruption.

To my mind, the real issue in NSW lies not in rules nor breaches of rules, but in transparency. If real estate developer X or mining magnate Y wants to donate funds to the political process, if they want to use their money  to undermine an MP, let them. Just make sure that the financial flows are on the public record. Then we, the citizenry, can respond.

One of the interesting tests that you can apply to current rules based approaches is to move them back into the past. If they had been in place, would the good things that we value now have come? Often, the answer is no. The world changes, so it’s just a corrective. Still, it’s a useful one for all that.


Evan pointed me to Merchants of Doubt and especially Chapter 6. It makes for sad if gripping reading. One of the difficulties is that there are, in fact, a number of conflicts/debates going on at the one time. One is about the science itself. A second is a political/ideological debate. The two overlap and interconnect.

The previous acceptance of the global warming hypothesis in this country at least, gave rise to some very silly populist public policy decisions. It also created a climate, pun intended, that facilitated the rise of the denialists. Now we are getting equally silly responses on the other side.

It really doesn’t matter. Keeping things very simple, we will know within a finite period – my children’s lifetime if not my own – whether the science is correct or not. As time passes, the probabilities will progressively firm up one way or the other.

As an analyst, my perception is that the global consensus view that human induced change is happening and is important continues to hold despite the attacks. This view mixes with other things such as the Chinese political need to clear atmospheric pollution over their big cities. This requires changes that would, I think, be facilitated by global warming action. So there will be action of one type or another. 

Friday, June 06, 2014

National Fair Work Commission and the Australian minimum wage

I do wish that the Fair Work Commission had not raised the Australian minimum wage. For the benefit of international readers, the wage was raised by 3 per cent. From 1 July 2014, the national minimum wage for a full-time adult employee aged 21 or over will be $640.90 per week or $16.87 per hour.

Don’t get me wrong, I support the concept of a reasonable minimum wage as a safety net and to avoid some of the problems that we have seen in countries such as the US. However, I found this Increase and some of the union comment on it quite problematic.

The minimum wage is not the same as the old Australian basic wage. That was calculated on the basis of the amount a male bread winner needed to earn to support a wife and kids. The minimum wage is a totally different concept, It is the minimum that employers must pay to adult workers of all types. There are lower rates for younger workers. Put the rate too high and you reduce employment opportunities. Put it too low, and you create employed poverty.

It is also a wage that covers a variety of ages and occupations. For many, its is the wage now on the way to a better wage. For others, it is the maximum wage. These are two very different groups. You have to get a balance between them. 

Maintaining a minimum wage does not  say anything about award conditions in other areas, although having a minimum wage creates a base for all awards. You could abolish all awards and still have a minimum wage. You could abolish the minimum wage and still have awards. They are separate questions.

The Commission's decision sets out its reasons for mandating the increase. I think that the Commission is wrong. If you increase the minimum wage at a time when the economy is actually soft and the unemployment projected to rise, then you are likely to increase unemployment. 

I also think that it has been unwise. As  see it, the first challenge at the moment is to ensure the survival of a minimum wage, the second to ensure a reasonable level to that wage. I wouldn’t count on either just at present.

Thursday, June 05, 2014

Australia’s weakening economy

Tonight, just a scan with a focus on economic statistics.

In a post (Should We Have Children?) Ramana referred to something that I hadn’t thought of, the impact of education debts on relationships and the decision to have children. I have written before on the very significant impact that the changing pattern in relationships has on other variables. As a simple example, by 1980, it was clear that the rise of two income families was reducing labour mobility because the need to earn two incomes, to have two careers, meant that couples had to take both careers into account before a move.

Yesterday, the Australian Bureau released the last of its series Employee Earnings, Benefits and Trade Union Membership, Australia, August 2013. One take home statistic: “Real (earnings adjusted by CPI) median weekly earnings in main job fell by 2.1% in the year to August 2013, the largest fall in a decade.” Mmm! That would fit with my observations.

That same day, the ABS released the Australian GDP figures for the March quarter 2014 showing a seasonally adjusted rise of 1.1 per cent for the quarter, up 3.5 per cent from the March quarter 2013. That’s a good result. However, the main driver in the rise was net exports, up 1.6 per cent. In industry terms, mining contributed 80 per cent of the growth in the quarter, The two results are linked, since rising export volumes of mining products was the main contributor to net exports,

Today, the ABS released the trade figures for April 2014 showing a biggish seasonally adjusted decline in trade terms. The main driver in the fall was coal, coke and briquettes, down $361m (10 per cent).
This fall was partly offsetting by metal ores and minerals, up $254m (3 per cent).  Since April, iron ore prices have come down suggesting that the trade figures may have deteriorated further. Oops! Building approvals have also continued to decline after a period of steady increases.  Then, in May Australian house prices fell by 1.9 per cent,the biggest single-month decline in house prices in more than five years, according to CommSec chief economist Craig James.

Finally back in May, the ABS released Australian Industry, 2012-13. It’s worth a browse.

In November last year, I was prepared to take something of a then contrarian view of 2014, suggesting the Australian economy was going to be strong than many expected. I held to that view in December - Friday Economics- economic outlook 2014. I’m not so sure now. I think that Australia may have stuffed up, despite the better than expected global economic growth. There have been too many shocks, too much instability.

I won’t call recession yet. That would be extreme. But it does look possible now, something I hadn’t expected I think that we will find out relatively quickly.


Yesterday, Leith van Onselen had a useful piece showing that while GDP went up in the March quarter, Gross National Expenditure went down after really flat lining for the year. Today, he followed this up with a piece  looking at the expenditure numbers adjusted for population increase. Australia’s population has been growing, so the per capita numbers are in negative territory.

Meantime, Chinese growth continues to weaken slightly, with the IMF advising against new stimulatory measures. The Chinese Government faces a difficult task in unwinding imbalances in the Chinese economy, so some further slowing is not necessarily a bad thing.

Yesterday, Roy Morgan released the results of its latest survey of business confidence. The survey was carried out following the budget. Business confidence in May fell 5.5 per cent from April to 114.3. Business confidence is now 16.1 per cent below the peak of 136.3 in October 2013 following the new government and 7.4 per cent below the average over the last 12 months.

Tuesday, June 03, 2014

Where have all the economists gone, long time passing?

Chatting today to a colleague, we talked about the importance of system design in public policy. The same thing holds true, of course, for private sector business management. In the public policy case, the trigger was the difficulty of knowing just what the the latest proposed changes in higher education actually mean.

On a somewhat related issue, I really miss not being able to properly use the analytical tools I derived from economics in my work. Of course I do to some extent, but its actually quite hard to present economic arguments when the knowledge of mental constructs or analytical techniques are no longer there. I am thinking here not of debates on macro policy, nor of arguments based on particular intellectual models that have become absorbed in the culture, but of economics as an intellectual tool kit used to analyse particular problems. Neither a spreadsheet nor a financial model does an economist make.

I worked as a professional economist for over twenty years, a period  when economists came to rule the roost. Now in my professional life, I rarely meet one. It’s actually quite hard; nobody knows what  am talking about. 

In industry economics, and that’s all about sectoral change, we talk about about industry structure, conduct and performance. If I use those phrase, nobody knows what I mean. But how can someone talk about sectoral change when they don’t understand anything about the dynamic, the intellectual issues associated with industry performance?

This may not sound important, but in a world where so many activities are being outsourced, how can you make judgements about actual effects if you do not have any knowledge of industry economics?  Let’s grow the not for profit disability sector. Wait, we have a capability gap; let’s have a capacity building program.  Wait, now we have a governance gap; we don’t have enough board members or senior executives to meet needs. Let’s have a governance program. Wait, our suppliers are going broke because we are not paying them enough; we have to restructure our payments schedule. Wait, we  now have a quality problem; we need a new quality program. And so it goes on.

None of these programs are necessarily bad. The point is that they could have been avoided or at least reduced with the most basic industry economic analysis.

Economics, or at least some variant of it, is important in determining what will be outsourced. That decision made, the remaining economists absolve themselves of responsibilities. It wouldn’t matter so much if Western countries did not have a risk avoidance culture. Let’s take an example.

Say we want to grow the not for profit disability sector as fast as we can. That will bring longer term benefits. In the traditional private sector model, failure is part of the central equation. Businesses fail because they do not meet market demand in the most cost effective way. Employees suffer, as do some customers. That’s a necessary cost  to gain the maximum economic benefits. 

This can’t happen in the pubic sector. We outsource because economics tell us that this maximises public benefit, Business failure is part of the price. But, actually, we can’t do this, we can’t let the market decide. We reject the fundamental dichotomy between the failure the market demands and the reality. Our risk management strategies demand that we find a way to avoid failure. So we go for a twisted system that , in the end, gives the worst results. It’s all very difficult.


Universities Australia had an interesting piece on the projected cost in Australian university fees. You can access it via this ABC story. Universities Australia is the universities’ industry association, so one has to be cautious re special pleading. Still, the numbers are interesting. Meantime, UNE VC Professor Annabelle Duncan has been talking to students. The university has just been ranked number one in Australian on-line offerings. It needs all the positive rankings it can get in our new world.

I haven’t said this before, but I am not necessarily opposed to uncapped fees. However, I do think that there is a design weakness in the current arrangements giving rise, in part, to what commentator DG has called moral hazard. There is a moral hazard in the universities can set their fees with someone else paying other than the customer. There is moral hazard in that a student can buy with the knowledge that they don’t have to pay.

From a Government perspective, there is an open risk of greater pay-outs now, lower paybacks later. That could become unsustainable. So, in system design terms, the Government has to set a cap on its payments. If a university wants to charge more, then the student pays out  of his/her pocket.   

Monday, June 02, 2014

England, Scotland & Mr Pyne’s proposals

Just following up on my discussion (Credential creep, the economics of education, with a dash of contract breaking or (alternatively) retrospective taxation, Over-reach: deregulation, fees and university education)  on the higher education budget changes. The UK has been cited as an influence on Mr Pyne’s thinking. This Wikipedia article gives you a slightly indigestible summary of the UK position. With devolution, the charging position varies to a degree between the different parts of the UK. This will give you an entry point for the position in Scotland where fees are lower for Scots. You can follow this site through to other parts of the UK to see what the position is there; it appears a good site.

There are several differences between the UK and the Australian proposals, but a few broad comments.

In the UK, the ability of universities to increase fees appears to have been capped at 9,000 pounds. Fees promptly increased to the capped price, in part (I think) because of the way it the scheme was introduced with cuts to university resources at the same time.

According to this Guardian piece, the 2012 UK changes have so far not disadvantaged lower income students. The UK loan scheme is structured to garner more from higher income earners. It also includes payments for living costs. That would greatly help student mobility in Australia. 

Finally, a Scottish kid seems to be in a much better position than an English kid when it comes to getting a university education. But then that’s been true for five hundred years!

I emphasise that these are not expert comments, just observations.      

Sunday, June 01, 2014

Over-reach: deregulation, fees and university education

Sometimes, you have to be careful in what you ask for. In the run-up to the Federal election, the bigger Australian metro universities supported deregulation of university fees. What they hadn’t expected was that this would be combined with a significant reduction in base funding plus an increase in the interest rate on student loans. Now the alarm bells are ringing among just that group that previously supported fee deregulation.

We are in uncharted waters because we are dealing with interacting changes whose effects are very unclear. I don’t pretend to understand them. If we apply simple economics, service delivery costs mean that the price change for qualifications is going to vary very significantly between academic fields. That’s one thing that has the Group of Eight worried. If we look at the demand side, the price paid goes up by the combination of the fee increase plus the cost of the interest charge. Depending on price elasticties, that should result in some reduction in overall demand. However, because the price change varies, there are going to be differential demand effects across disciplines. 

One of my underlying points in Credential creep, the economics of education, with a dash of contract breaking or (alternatively) retrospective taxation, is that the absolute as compared to the relative return on some degrees may not be as high as people think. If people really want to be a nurse or teacher or fire fighter or an engineer, then they will be prepared to pay a certain higher price for that satisfaction. However, to the degree that people are motivated by financial return, there will certainly be demand shifts reflecting shifts in financial return at the margin. I don’t think anybody really knows what these will be. We will just have to wait and see while people crunch numbers and set new prices.

Minister Pyne places considerable weight on the suggestion that some degree prices will fall. I’m sure that’s the case, although it may take a little time. At  any price, you can get a supply so long as production costs can be sufficiently lowered. As former UNE VC Jim Barber liked to point out, new delivery technology means that cheap mass on-line delivery is possible. To the degree that the market demands or is required to demand a credential, that credential will be supplied.

One important issue ignored in the current domestically focused Australian discussion is the impact on the country’s export of education services. Measured by net contribution (exports minus imports), this is by far the largest Australian services’ export sector, yet the impact has not been discussed. Perhaps it’s not important, the changes won’t have any affect. I’m not sure about that, although I don’t have a formed view.

The political process will dictate changes, compromises, so we can’t be sure what will finally emerge. My feeling is that Minister Pyne and his advisers have not fully thought through the dynamic aspects of their proposals. They have over-reached. They will have to make changes.


Minister Pyne is sticking to his guns on his claims. Noting that the Government had eighteen months to implement the new funding model, he said:

"I'm not going to respond to the different statements or claims being made by particular vice-chancellors because at the end of the day, I think competition will drive prices down and students will be the winner in terms of quality and price." 

The Universities face a complex commercial challenge in part because the Minister can actually retaliate to any decisions they make by simply cutting funding, in part because of pricing complexity. The Minister uses the phrase at the end of the day. That allows for unforeseen price effects being subsequently corrected via competition.

Ignoring Ministerial retaliation, I commented above that price change for qualifications is going to vary very significantly between academic fields. I want to amplify that a little.

All businesses work on cost plus a margin. To the degree that they cannot control price, cost becomes the immediate driver. However, they also have to balance quality. In the longer term, they try to influence price through product differentiation and innovation or restrictive practices. They also choose which market segments to operate in. If they get all this wrong, they suffer and so may the consumer.

In the university sector where domestic prices have been fixed, the main marker of competitive performance has been varying academic entry scores. These show quite clear variations between institutions and courses. Because Australian students are increasingly immobile, most wish to or are forced to study near home, universities with high population immediate catchments have an advantage.

Distance education and international education raise somewhat different issues. In Sydney, university education is effectively an oligopoly so far as campus study is concerned. Distance education is both more price sensitive and competitive since locational advantages are largely removed. International education generally involves full price. although prices vary between institutions and countries. I spoke of Australia’s exports of education services earlier. However, we also import, with an increasing number of Australian students studying overseas. Here students have made a judgement that they will get a better personal return despite the higher price. This imposes a probably minor if growing price constraint on Australian universities.

Australia’s larger universities are big businesses. You just have to walk any one of the campuses to see it. They have buildings to maintain, debts to service, residential accommodation to fill, fixed costs to meet. You can see why the size of the initial funding cut is causing pain. The hurt is greatest at the higher cost institutions including many of the metros. Later, when they can charge fees, the equation may change to some degrees. 

Last year, a number of the bigger universities placed an effective freeze on any further expansion in student numbers, using increased entry scores to ration places. We have become big enough, they said. This is important because it affects their market freedom, including their ability to price. If you don’t want to grow student numbers and have unmet demand, you can use price as a rationing device.

How all this is going to play out on the ground is beyond me and, I suspect, anyone else for the moment, To say, as Mr Pyne did, that students will be a winner in term of price is clearly a nonsense. A key part of the exercise is to make students pay more. Mr Pyne just hopes that the competition will limit the extent or price increases. The only exception I can see is the entry of vocational providers with lower cost bases into parts of the university sector saying to students that your HECS debt will be lower if you study with us. I think that’s the real competitive constraint.

Postscript two

My highly valued if unpaid research kvd found this post on the comparative costs of international education: COMPARING THE COST OF A DEGREE OVERSEAS. Some interesting stuff,