Monday, September 29, 2014

Monday Forum – the changing face of work

In this forum, I want to pluck your brains.

I write a fair bit on changing management patterns. This includes the use of technology, the organisation of work and changes in perceptions, structures and roles.  One of the interesting questions here is just when particular approaches affected particular workplaces.

Remember the telex? While this dates back to 1926, it really exploded during the 1970s. Like the telex, the fax has a longish history, actually predating the telephone. In 1964, the Xerox Corporation developed the first commercial fax machine. By the late 1970s, a number of models were available. By the early 1980s, fax was fast replacing telex.

These are technology examples. If we look at organisational examples, consider the emergence of the executive, While the idea of boards or executive committees has a very long history indeed, the mass spread of the idea of the executive as a form of governance is quite recent, especially in the public sector. It links to what we now call corporatist models. 

I come now to my questions to you. If you look at your working life, what are the really big changes and when did you first become aware of them? Feel free to go in any direction you like. I’m just interested in what you have to say.

Sunday, September 28, 2014

Sunday Essay – looking back at 2006: the importance of history

I started this post on Saturday morning. Would I finish it then, I wondered? No, as it tuned out. It was such a beautiful day, quite gorgeous really. Instead, I went out to revisit Berry Island. Then Sunday was a beautiful day as well.

I have written 2,686 posts on this blog since my first test post on 19 March 2006. That’s a lot of writing, causing me to pause and reflect.

In my second post on 8 April 2006, I described the purpose of Personal Reflections in this way:

Since my first test post, I have been mulling over how I want to use this blog.

Much of my professional work is client or management focused. There is so little time for reflection, for integrating the things I do and learn, both professional and non-professional. There is also little time for conversation.

I work mainly from a home office. On some days I am alone for six to eight hours except for the constant email traffic, most focused on work issues. This adds to the conversation gap.

So, thinking about all this, I want to use this blog to chat about all those things that would otherwise be submerged.

Have I done that? I guess so. The blog is still my vehicle for personal reflections. That said, my world has changed enormously since 2006 and my writing has changed (at least to some degree) with it. Writing so often over such a period, the blog and its fellows have become in part a record of the changing currents in my life, Australian life and beyond.

I say that my writing has changed to some degree, for in fact the second and third posts dealt with history, still a current pre-occupation.

In On History, I reported that I had created a second blog - - dedicated to the history, culture and activities of the New England region in Australia.

I then went on to discuss Australian Prime Minister John Howard’s attack on what he called "black arm band history. “The PM's statement had been attacked and supported”, I stated. “However, my interest lies in what the debate tells us about the current state of historiography.

At the time, I felt that at least so far as Australia is concerned, the study of history had been in decline as a discipline. I found this sad, for I loved history.

Do I still feel this way? I’m not sure. Sometimes I do, sometimes not.

I would argue, I think, that the influence of history as a discipline within the academy has declined. I would also argue that this is not unique to history (consider the case of economics), but is part of a broader pattern of change flowing from the changing role of universities themselves as they move from educational institutions to a still to be defined role as training and credentialing institutions whose relevance depends upon an imperfect marketplace.

Does this sound tart? Perhaps. I would assert this, however. As universities have changed their role, they have vacated space that has been filled by other vehicles. In my historical research and writing, I use university based research all the time. However, whether it be history, economics or Australian archaeology, .it is nearly always pre-Dawkins. Now for the things that I need post Dawkins I have to go elsewhere.

The stuff I want does not exist within the academy. Now I have to search elsewhere, finding people like me who are on the outer but are interested. I do find it and that is why I am less pessimistic than I was in 2006.

Returning to that ancient post, I noted that when I looked at the Prime Minister's comment, I looked at the history wars, the conflict between different views of Australian history. Ah, there is another change. In 2006, I was concerned about the history wars and indeed the broader culture wars because I saw them as genuinely important. .Now I am bored except to the degree that they deal with conflicts in values tat are of interest as an analytical topic. But why have my views changed? .

The history and culture wars have now become irrelevant except to the degree that they deal with conflicts in values. Then they are of interest as an analytical topic. Beyond that, they actually have little to do with history or indeed culture.

One of the reasons, not the only one, that I have been able to break free from the travail of the history wars lies in my changing attitude to the decline of history. I am less worried about the history wars because there are now so many outlets, so many people involved that many different views are presented. The gatekeepers have lost their power.

Turning to methodological matters, in my then response to Mr Howard, I made a distinction between two things so far as history was concerned.

The first was the question of topic selection, the question to be answered. Selection of topics has always been determined by interests and values. So topics shift as interest and values shift.

The second was the question of methodology, the approach to be adopted.

I may disagree with topic selection. I felt, for example, that the current selection of topics in the Australian school curriculum was narrow and biased. But that's an opinion.

However, I did worry when (as seems to be happening) the approach adopted to the analysis of questions and topics was affected by opinions and values. Herein, to my mind, lay the real problem in the history wars.

History as a discipline has (or should have) its own rigour. The purpose of analysis is to test, not prove. When proving or justifying becomes the central point, the discipline is lost.

This remains my view.

Wednesday, September 24, 2014

Musings on a visit to Armidale – art and all that stuff

I try, not always successfully, to make Wednesday my Australian day, something that links to Australia life  or history as compared to the more serious stuff that sometimes dominates this blog. And who could blame me for wanting a break? Or you, for that matter.

First, a challenge. kvd thought that more than you could point a stick at was an Australian phrase. The alternative phrase is, it appears, more than you can shakGordon Window 2e a stick at. As best I can work out, its not an Australian origin phrase at all. Anybody know the derivation?

Friday morning last saw the launch of Came to New England, a book written to mark the 75th anniversary last year of the New England University College. I had been looking forward to it, a previous launch attempt had to be cancelled, but it left me feeling a bit moody and reflective. 

The official history of the University of New England, Mathew Jordan’s official history of the University of New England, a Spirit of True Learning,  is a top down institutional history based especially on official records. It’s good, but suffers from the weaknesses of its genre.

Came to New England is very different. This is a bottom up history, with thirty-seven contributors (staff and students) recording their perceptions of the place. My two chapters were context chapters, still personal, but providing part of the historical context.

The group at the short launch ceremony was relatively small, all authors apart from the small official group. Some had come considerable distances. Most were older than me. One price of the Dawkins reforms is just this: institutional change to the point sometimes of destruction so that those with the greatest and most intense memories of university as a place of intellectual, social and cultural change pre-date Dawkins. Its not just UNE, although that institution was more than others damaged by the changes. It seems to be almost universal. For many, universities have become places to pass through, not be immersed in.

The launch was held in the Booloominbah foyer in front of the Gordon Windows, a spot I have known well over many years. It was also a place my father knew well

student protest 2014

living in the big house after he arrived as the first NEUC staff member in 1938, as did my mother who remembered it when the house was still a family home with old Mrs White in residence.

I enjoyed talking to people, catching up, but I noticed the gaps, those who would once have attended. I couldn’t help thinking that this might be the last time I saw some of those there. Who would record the stories ?  I try, but I can only do part.

Walking outside, there was a student protest. Perhaps some things don’t change! 

New England is still a strongly residential university, something that gives it a different feel to many larger universities where students travel to lectures when they must.

Proposed changes to university college arrangements had brought the students out in protest. It was a very good natured and well ordered protest. “What do we want?”, was one of the chants. “Communications”, was the response. I rather think that the Chancellor and VC who were at the launch got that message.

I really was feeling moody at this point. It wasn’t just aging friends and colleagues, but also the realisation that for those students this was their place now, that my place lies in the institution’s past. This feeling was accentuated by my own deep connections; my earliest memories are connected with what was NEUC; the portraits and photos on the walls are friends of my parents or grandparents or, in some cases, my own family; I played with their children or grandchildren; it is my place in a deAnna Henderson Basin Roadeply personal sense. I become old not because of my age, but because I am part of an increasingly tenuous link between present and past.

Shaking the feeling of gloom off, I went up to the New England Regional Art Museum to look at the latest exhibitions. I got very excited by the new exhibition by Anna Henderson. This painting is called Basin Road.

I rushed off to find out about her. “Is she from Inverell”, I asked? They checked. No, she is living at Guyra. Still, that’s nearby.

The friend who was with me could not quite understand my excitement. It was partly a personal connection, for one of the paintings was called Oakwood. That was the district where the property was that my grandfather took up management on a newly subdivided block, where he brought his new bride in a spider sulky. But it was also an artistic connection, the representation by different painters of the changing colours and patterns of New England.

I couldn’t explain that. I realised that I lacked the visual language and indeed the context to explain properly. This was a real frustration. If I who know can’t bring it alive, who will? I can explain the paintings to some degree in artistic terms, but I can’t presently explain the shadRain on the Uralla Road Julia Griffinings that show difference across land and style.

This painting by Walcha artist Julia Griffin is called simply Rain on the Uralla Road. It is a scene that I know so well. I have driven it many times.

I find that it is of continuing importance to me explain, to justify if you will. Justify? 

I want to explain to people from my own perspective why these things are important. I am not saying that they are important from a global or even Australian perspective. But it would be nice to explain to locals that they have a culture  that is varied and constantly evolving.  It would be nice to make that culture whether it be expressed through music, film, literature or at available to a broader audience. 

Call it a dream if you like.  But it would be nice.          

Tuesday, September 23, 2014

If a equals b – testing the proposed Australian terrorism legislation and indeed any public policy

I don’t feel much like talking about politics tonight nor about public policy. My thoughts are running in a different direction. Still, a very brief comment. Tomorrow, I will go to to that direction.

A fair bit of public policy is based on this logical equation, if a then b. Governments rely on it all the time in  presenting their arguments.

If we introduce new security restrictions, we will reduce the risk of terrorist attack. If we make drivers do more hours before they get their driver’s licenses, we will reduce road fatalities. If we impose new restrictions on swimming pools, we will reduce drowning deaths among the young. If we impose licensing and inspections conditions on septic tanks, we will reduce water pollution. If we introduce new controls on advertising of certain food stuffs, we will reduce obesity.

This form of argument is highly persuasive. If you agree with b, then how could you argue against a? You try it some time. People will generally say that b is a good thing, therefore you must support a. If you don’t, watch out. In fact, you are generally dealing with a logical fallacy.

Just because I or the Government assert that a equals b doesn’t prove a damn thing. The relationship has to be proved. Further, even if a relationship does exist, then you have to ask about the cost. Is the price we pay worth the gain?

If you follow this approach, ask these questions, you will very quickly make yourself unpopular at dinner parties and indeed with politicians and some public servants. Consider this scenario.

You are at a dinner party or the pub where someone is supporting the anti-terror legislation, arguing that it will prevent terrorist attacks from IS or whatever. Now you say I don’t understand this. How will the proposed legislation stop terrorism?  We have lots of controls and surveillance. Why aren’t these adequate?

Often this will reduce the conversation to a sometimes apoplectic halt at once. However, if the other side in the conversation mounts a reasonable case, then you move to the second question. I am worried about the cost to all of us from these measured in reduced freedom. Do we want this extra surveillance? Are the gains worth that cost?

Now if your role is to learn and not persuade, you may be forced to accept the argument if the other side puts forward a persuasive argument. But you will at least have learned something.

I suspect that the most useful thing that we can do as bloggers, commentators or commenters is just to ask questions, to make the other side prove its case. Of course these things are matters of judgement. However, that does not remove  the need to subject argument to logical analysis.

Monday, September 22, 2014

Monday Forum – another what you will

The news of the Australian terrorism raids was breaking as I drove north. It was all very dramatic, with eye witness accounts of helicopters hovering while heavily armed police raided houses. We will have to wait for the court cases (or the absence of them) to know how much truth there is in the whole thing, but certain things made me extremely uncomfortable.

To begin with, the force applied seemed excessive. This judgement may be incorrect, it depends upon the facts, but I don’t like the increasing militarisation of our police forces. It makes me personally uncomfortable to see police kitted out in flack jackets and festooned with weaponry watching for fare evaders at railway stations. I keep wondering if they will use that gear on me. It may be irrational, but I feel threatened.

More importantly, the language used by the Government and the press to describe the raids was, to put it mildly, quite extreme. Again, we have to wait for the facts. It may be that we were dealing with an extreme threat, although that is not clear at this point. The intent to seize and behead a few individuals, while dramatic and unpleasant, does not constitute a threat to national security. It is a criminal matter.

As a small l liberal, the coincidence of the raids with the Government’s plans to introduce legislation giving increased powers to Australia’s security agencies makes me very uncomfortable. I am not suggesting a conspiracy, that the raids were intended to reinforce the need for new powers. Australia is not Nazi Germany, Rather, the coincidence reflects locked in views in which the response to a threat leads to an automatic reaction that we must have more powers, must do more. This leads to a disproportionate response that can threaten civil liberties and that, at the extreme, can actually create the very demon that the response was intended to protect us against. 

Sunday, September 21, 2014

Sunday Snippets New Zealand elections, Scottish independence

Hi all. I have been travelling, making posting difficult. Yet once again, my apologies.

On February 13 this year I wrote:
Just at the moment, there is a high degree of admiration in Australia for the achievement of the New Zealand Key Government in very difficult circumstances. I share that admiration. However, in cherry picking those things that suit them, many in Australia ignore some key features of the New Zealand Government.
The first is that on social and moral issues New Zealand is, as it has been for many years, on the Australian left. The second is that New Zealand actually has a very pragmatic approach, In an interview in today's Financial Review with NZ Finance Minister Bill English, he said and I quote:" We're a suburb of Australia and Australia is a province of China." Those are the realities for New Zealand. The country is dependent on economic management in Australia and China, and can only respond as best it can. Australia has yet to learn this lesson."
Mr English's rhetoric and arguments about structural reform would be familiar to many on the "right" side of politics in Australia. However, he makes two points that would be less familiar in this country.
The first is the need for stability, the need to provide a framework that will allow individuals and businesses to plan. Take time, be careful, don't rush.  The second is the need to look after the less advantaged and those adversely affected by change. Focus on them, but keep to your core approach. I have called this sharing the benefits.
If you do these things. Mr English argues, people will come along because they see the emerging benefits.  Just give them time. That position is supported by the New Zealand public opinion polls.
This is not the Australian position. Here the atmospherics and the poison dominate.
 In the months since I wrote, Australian Governments at all levels have continued the same broad Australian approach. In New Zealand, the John Key lead National Party has just achieved a sweeping electoral victory giving it a clear mandate to continue the program it has been developing. Mr Key and his colleagues bring change through a process that involves consensus, respect and conciliation within a clear sense of direction. In Australia, Governments try to rule by dictat. We have a mandate, we must do, get out of our way. That doesn't work.

In Scotland, the independence campaign lost the vote, but has changed the UK political landscape for ever. I haven't had time to work through the details, but I suspect that the Westminster politicians have over promised in their desperate desire  to keep the UK together. There will be some difficult and tense times before the details are worked through. Still, the Scots have shown that it is possible to achieve major structural change through democratic process in a political structure that seemed set in stone.

To the Catalan independents who hoped for a positive vote, the Spanish Government who wanted a negative vote, both have one. Scotland shows how divergent views can be accommodated in a single structure.

Finishing, just a note. If I haven't written on this in just a week or so, remind me that I was going to write something on super forecasters!

Wednesday, September 17, 2014

Blessed solitude in an internet world

I have spent a fair bit of my life just driving. That’s inevitable if you grow up or live in country Australia. I am not talking short commuter style trips of less than two hours, but long trips stretching into multiple hours.

I can no longer drive the nine or twelve hours that I used to without blinking, sometimes a drive or two a week. I think the most extreme was more than twenty six such drives in a thirteen week period. Still, while I have slowed down a little, I am still happy to get into a car for a seven hour drive.

I do take more breaks, now. When young, my daughters were greatly influenced by the NSW Government’s Stop, Revive, Survive campaign. This has to be one of the most successful and indeed sensible road safely campaigns. Drive for two hours and then take a break. My daughters insisted, and I got into the habit. Now it has become an integral part of my driving pattern.

On these long drives, I often listen to the radio  assuming, of course, that I can. There are large parts of country Australia where you cannot actually get the radio. Still, sometimes when there is radio reception, I just switch the radio off to listen to my thoughts. There is a sort of relief of tension. Even casual listening requires a degree of concentration.    

I was reminded of this by an interesting if short book review in The Economist of Michael Harris’s The End of Absence: Reclaiming What We’ve Lost in a World of Constant Connection. There is nothing especially profound there, simply a reminder that the constant need to stay connected, to keep in touch, has the same crowding out effect as the radio on those long car trips. Solitude, the time to think and process, is lost.

You can see the addictive effect of constant connection in the withdrawal feelings we get if, for any reason, our internet connections go down. I find myself feeling lost, facing time that I had not expected. There is also that feeling that says I may be missing something. What if something happens?

All this is silly, I know. I grew up in the pre-internet world. If something bad happens, I will find out. No connection? Do some reading, thinking or go for a walk. I wouldl be better for that rather than adding to my computer induced stoop. Yet its remarkably hard to break the addiction.  

Sunday, September 14, 2014

Quis custodiet ipsos custodes? Rationality, proportionality and the latest war on terror

I will continue Saturday Morning Musings - the use and abuse of the term business, but other things have been happening. In Monday Forum – the Ukraine, a new war on terror and corporate investment, I went back in part to an old post of mine and said in part:

I am not saying that Australia should not be providing a degree of military support against the Islamic State. I am concerned about the proportionality and common sense of some of the rhetoric and of the domestic measures that the Government is proposing to protect us all from home grown jihadists. To my mind, the side-effects from the preventative medicine are likely to be worse than the cure.

I do not share the views expressed by the Greens or some others on the left that Australia should not be involved. I think that we should. It’s the language that is now being used that scares the living daylights out of me Again, we are likely to create the enemy that we fear. To illustrate this, let me make just three points.

First, the West cannot defeat the ISIL by direct military action. That has to be done locally. The West can use power to hold the line and to buy time. That’s about it.

Second, the best way of containing ISIL is by marginalising it, letting it destroy itself, treating it with contempt. The more credibility ISIL is given by extreme language, by presenting it as a supreme threat, the more power it gathers.

Third, ISIL cannot actually damage the West in any real sense. Assume a worst case scenario with terrorist attacks in Western centres. Life goes on. The IRA couldn’t bomb the UK to its knees. They did damage, but didn't have the power. I am not equating the IRA to ISIL. I am simply making an observation about the reaction of the civil population.

ISIL is a disease like Ebola, just less dangerous outside the epicentre. I am only guessing, but I imagine that the most that ISIL could kill in Australia in any one year with maximum effort and effect is significantly less than the number of road deaths in the same period. I wonder, then, why we are treating ISIL as though it were a case of bubonic plague in the days when we didn’t know what that plague was? 

We have to be careful about our cures. When the Australian Government raised the threat level to high, Australians did not know how too respond. What did it mean? What could we do?  The answer, of course, was nothing. And yet, at the same time, ASIO wanted more powers. So a heightened threat level added to the apparent case for those powers.

Am I being too cynical?  Maybe. I live in a world where a few deaths leads to silly swimming pool restrictions, where the narrow risk of a septic tank leak leads to what has been called a poo tax.I fear I put the the latest security proposals in the same class.

i wonder. We do tend to create our own devils.

Saturday, September 13, 2014

Saturday Morning Musings - the use and abuse of the term business

The decision of the Australian High Court in the temporary protection case (here; a link to the verdict is included in the story) represents another set back to the Australian Government's stop the boats at all costs policy.

You don't have to be for or against the policy to know that the policy has come at a considerable cost, financial and human. To those supporting the policy, these costs are acceptable. Those opposing it obviously take the opposite view. To them, the costs are part of the arguments against.

My argument has been a little different: even if you take the Government's objectives as a given, have they gone about it in the best way? Here I argued from early on that the Government's policy approach was unnecessarily clumsy, creating damage (among other things) to our relations with Indonesia. It's kind of a blunt crash or crash through ethos.

Down in Canberra, the changes that have been imposed on the public service by the Government continue to cause ripples. The Canberra Times remains the best source here. This is the latest example: Tony Abbott's indigenous takeover in 'disarray'.

From a practical perspective,  public servants in all Australian jurisdictions are struggling to deal with a multiple changes that interact with each other: budgets are being cut; services are being outsourced; new management models are being introduced, some not so new re-introduced; with the whole package wrapped up in the latest version of modern management speak whose practical effect it to make the process so opaque that even those inside the system struggle to understand what it all means, let alone explain it to those outside the system. Most public servants are just keeping their heads down, trying to keep things going as best they can.

It will be clear from my writings that I am out of sympathy with the changes.

I dislike the new jargon. Consider the use of the word business. University VCs talk of their institutions as businesses, while senior public servants sometimes talk of their agencies as the business. The business needs this

But what is a business? One definition reads: an organisation or economic system where good and services are exchanged for one another or for money. Wikipedia states:  "business, also known as an enterprise or a firm, is an organization involved in the trade of goods, services, or both to consumers." The concept of transactions, of exchange, is central to both definitions. So if an agency is a business, its core activities must focus on transactions, on exchange.

This leads to a second question. If an agency or institution is a business, what is that business? Put this another way. If a business is about transactions, what transactions are we talking about? Do those transactions actually represent the core of what we do? This gets us into slippery territory. You can see this clearly if you ask a simple question, who is the customer? 

In the case of Australia's universities, for example, they have multiple customers, including especially the Australian Government who acts as funder and regulator. Similar issues arise with specialist medical colleges. Each customer is involved in often overlapping transactions. In this mix, what are the core transactions? How do these relate to the business as defined?

In practice, very few organisations define themselves in terms of transactions or, indeed, business as such. Take BHP Billiton as an example. The company defines itself in this way: "We create long-term shareholder value through the discovery, acquisition, development and marketing of natural resources." This statement has the advantage of being clear. Transactions are there, but the key thing is shareholder value on one side, a set of activities on the other. BHP Billiton knows that it is a business, doesn't need to talk about it.

Now compare this to Sydney University.  Its strategic plan begins:
The University of Sydney is a large and diverse institution with a broad range of disciplines and a strong shared identity that binds us together as a community and shapes our strategy.
At the heart of our strategy is our shared common purpose to create and sustain a university in which, for the benefit of both Australia and the wider world, the brightest researchers and the most promising students, whatever their social or cultural background, can thrive and realise their full potential. 
The introductory statement on the About page reads: 
Our scholars and students share a passionate commitment to the transformative power of education.
Our research makes a real difference to our understanding of today's world and how we work and live in it, and we enrich our community by bringing together people from all social and cultural backgrounds.
These are aspirations expressed in marketing terms that reflect that nature of Sydney University as a major tertiary institution.. But how do they link to the expressed concept of Sydney University as a business or the phrase "the business" used in internal meetings?

If we now turn to the NSW Department of Family and Community Services (FACS),we find that the About Us section begins:
We are committed to achieving the NSW Government targets and ambitions as outlined in the NSW 2021: A plan to make NSW number one. We measure our performance against these targets through indicators which we monitor and review regularly to improve our services.
Further information our performance can be found in the NSW 2021 Performance Reports.
 Our work is broad and challenging. Our objectives for 2014-16 are:
  • Children and young people are protected from abuse and neglect.
  • People with disability are supported to realise their potential.
  • Social housing assistance is used to break disadvantage.
  • People are assisted to participate in social and economic life.
  • People at risk of, and experiencing, domestic and family violence are safer.
  • Aboriginal people, families and communities have better outcomes.
We will achieve our objectives by improving the way we work:
  • We put people first.
  • We create local solutions tailored to meet local needs.
  • We work with government, non-government and community partners to reach more people with better services.
  • We build an agile and cohesive department that leads and delivers social policy reform
Again, aspirational relative to the role of the Department. But how do these goals link to the sometimes expressed concept of FACS as a business or the phrase "the business" used in internal meetings? As with Sydney University, the reality is that they don't. 

If the term business is so ambiguous and uncertain, why do people use it in circumstances where it is arguably not at all relevant or, at least, of uncertain meaning?

There appear to be three reasons. The first is just fashion, that being a business is somehow good. The second is that business appears to be used as a synonym for business like. The third and more complex reason links to implicit mental models about the importance of markets and the role of government.

I will extend this argument in my next post.


Tuesday, September 09, 2014

Scotland and the fight for New England self government

Back in 2009 in a piece exploring the question of identity, Saturday Morning Musings - on being British, I wrote in part: 
Growing up, my close identification with my maternal grandfather meant that I identified strongly with Scotland because he did. At one level, this did not make a lot of sense. Both my paternal grandparents were born in England, my maternal grandmother came from English stock, so the Scottish side through one set of great grandparents made me at best perhaps a quarter Scottish. However, it was a matter of emotional connection.  
The link was emotional, but it was more than that. 
I was a reader, and my grandfather used to give me books. One of the first more serious books I read as a child was H E Marshall's Scotland's Story (first published 1905). I read Sir Walter Scott (1771-1832), and browsed the books on the clans and tartans of Scotland..
I had a Drummond tie, while my mother and all my aunts had clan broaches with the Drummond motto Gang Warily. While I was at primary school my grandfather gave me a copy of John MacDonald MacCormick's Flag in the Wind (1955), the story of the Scottish National Movement. This book resonated since I was already a strong New England New Stater, so I became a Scottish nationalist by sympathy. We wanted self-government, so did Scotland. 
As an aside, all this reading had one odd, later, outcome. Many years after this I was at a cocktail party at the British High Commission in Canberra. Some of the younger staff I was talking too were puzzled about the rise of the SNP, Scottish National Party. I realised that they were all southern English and actually had no idea of Scottish history. They saw the SNP as a strange aberration.  
This was well before devolution, the creation of Scottish and Welsh parliaments in 1998. A slightly odd conversation followed, which saw an Australian public servant explaining to British diplomats something of Scottish history and the possible constitutional implications for the UK!
 I mention this now because it the latest opinion polls show that the yes case for Scottish independence has pulled ahead causing a degree of panic in Westminster. You don't need to vote for independence, the argument runs; here is another set of powers you can have if you stay in the UK.

Personally, I hope the no case wins,  if just. Scotland has already achieved major devolution of power and will gain more. The costs of full independence strike me as a tad high. I find also myself torn between my continuing sense of Scottish patriotism and other things, including my sense of UK history.   
In this context, the remarks of Australian Prime Minister Tony Abbott on the independence issue raised a degree of ire in Scotland. They were insensitive. More to the point, they displayed a complete lack of understanding of Scottish history. They also had Australian connotations that were not encouraging from my perspective. 

Agitation for self-government for Northern New South Wales is now 153 years old. That's half the time Scotland has been a member of the Union. We have not sought independence from Australia, simply the right to govern themselves within the Federation, to have a real say in setting directions and priorities. Looking at Mr Abbott's comments on Scotland, I wonder if he has any comprehension of this?

Our present request is simply the right to have another vote. We lost the 1967 vote 53% to 47%. The political dynamics then were very similar to those holding in Scotland now. The question of who might hold political power in New England, what would be the affect on political power in Sydney, drove party political responses. Scotland is further advanced than New England in that it has already achieved what we seek. The benefits to Scotland from devolution seem clear. Yet the pattern of arguments remains very similar. 

In 1967 as in the 1880s, the 1920s, the 1930s and the 1950s, we were told yes, you have real grievances, but you are better off staying part of NSW. There are other solutions such real decentralization and the devolution of powers and decision making via regional councils. There has been no delivery. Meantime, the structural decline that has gripped Northern NSW for over 100 year continues.

Is it too much to ask for and be given another vote on self government? Isn't that our democratic right?    

Saturday, September 06, 2014

Saturday Morning Musings - Jennifer Westacott's nostrums

Back in August, Business Council of Australia CEO Jennifer Westacott delivered a speech on the importance of innovation in the public sector. This resulted in somewhat stinging response from Paddy Gourley: 'Innovation' snake oil and other business cant: Jennifer Westacott's unwanted advice.

Mr Gourley has his own biases. They come through clearly. Still, he makes some valid points.

In her paper, Ms Westacott says in part:
The fundamental value proposition in the public sector context is better outcomes: 
services that are easier to use

  • regulation that empowers rather than impedes
  • a better customer experience
  • better value for money for the taxpayer
  • The greatest challenge in a highly constrained public spending environment is to extend the value afforded by the dollars we spend.
Can you spot what’s missing here? There is absolutely no context: there is no reference to the role of the public sector in providing advice; there is no reference to politics, minsters and the nature of our democratic system; there is no understanding of roles. The public sector does the best it can, but it operates in a highly constrained environment.  Ms Westacott refers to a highly constrained public spending environment, but it’s a little more than that.

The public sector has many different roles. Each of those roles has different dynamics. Each needs to be addressed separately, if within a unifying framework that starts with the role of Parliament, of Government, of ministers.

Consider the first dot point, regulation that empowers rather than impedes. Who is finally responsible for regulation? I guess it depends on just what regulation and what indeed is meant by regulation. Still, in the end it is ministers and governments who actually set the framework here. Those are the audiences that Ms Westacott must address if she wishes to achieve her first point. It has little to do with either management or public administration.

Turn now to better value for money for the tax payer. There is an obvious definitional point in term of what we mean by better value for money. Leave that aside, from my experience most public servants are concerned with better value for money. I am constantly astonished by their commitment. But they can only do so within their scope and also have to cope with increasingly complex and burdensome policies, processes and procedures.

If Ms Westacott really wanted to make a difference she would focus on simplification. How do we reduce administrative overhead, break the bounds of command and control systems? 

If Ms Westacott really wanted to make a difference, she would focus on structures and decisions at the top within the bounds set by our Westminster system. What has happened to the role of the minister? Is she or he just a cipher within an increasingly presidential system?

If Ms Westacott really wanted to make a difference, she would say how do we maintain innovation and creativity within increasingly cash constrained mega-agencies where everything is centralised?

Each day, I hear public servants say things like this: that’s very silly; how do we change it to minimise the effects on our clients?

Each day, I hear public servants say things like this: we have to deliver; how do we keep business as usual going given these changes?

Each day, I hear public servants saying go with the flow, do as you are told. It’s silly, but we can’t change things.
There is a very old saying: the fish rots from the head.

For over 20 years Ms Westacott, and I quote from her CV, “occupied critical leadership positions in the New South Wales and Victorian governments. She was the Director of Housing and the Secretary of Education in Victoria, and most recently was the Director-General of the New South Wales Department of Infrastructure, Planning and Natural Resources.”

To my mind, Ms Westacott is part of the problem. I accept that this may well be unfair. I accept that her speech was delivered to a particular audience in a particular context.  I am sure that she did many good things in her official roles. Yet in her speech there is nothing that will actually help. It seem to me to be a set of nostrums set within an intellectual framework that has already failed.

Thursday, September 04, 2014

Would an emissions trading scheme have helped the Abbott government handle the renewable energy target mess?

You have to be careful about locking yourself in via rhetoric and targets. A case in point is the abolition of Labor’s emission trading scheme. I mention this now because of an interesting piece in yesterday’s Australian Financial Review by economics editor Alan Mitchell, Abbott misplays  greenhouse policy.

The crux of Alan Mitchell’s argument can be summarised thus: “Abbott should have seized the opportunity presented by the Senate to keep Labor’s emission trading scheme.” Hang on”, you might say, “isn’t this a core promise? How could Alan Mitchell say this?”

The challenge can be summarised this way.

During the election campaign, the opposition committed to the abolition of the ETS (Emissions Trading Scheme) and its replacement by a direct action program. The second involved the expenditure of real money. It was actually a slightly odd response in ideological terms for a market oriented government; the replacement of a market mechanism by direct action and Government cash.

Now the Government has a problem with its Renewable Energy Target. This is where things get complicated for simple mortals like me just trying to understand.

Back in 2001, the Howard Government introduced a Mandatory Renewable Energy Target of 9,500 GWh of new generation, with the scheme running until at least 2020. This represented  a doubling of renewable generation from 1997 levels. So far so good.

In August 2009, the Rudd Labor Government passed new legislation extending the target to ensure renewable energy obtained a 20% share of electricity supply in Australia by 2020. This was expressed not in percentage terms but as an absolute number; 45,000 gigawatt-hours by 2020 equal to 20% of projected electricity demand.

A teensy, weensy problem now emerged. Sadly, or perhaps good depending on your views, demand for electricity actually declined. Now that 45,000 GWh is not 20% but far higher. If the target had been expressed as a percentage, then it would have left the marketplace to make its own estimates. Now all sorts of investment decisions have been made not on a percentage but an absolute number. You see the Government’s problem?

The Warburton report into the future of the target has not been of especial help to the Government. While Mr Warburton’s appointment was much criticised because of his views on climate change, the report appears to be an objective assessment of trends and options. In this sense, it has handed the problem back to the Government where, indeed, it rightly belongs.

I have no idea just what the Australian Government might do. However, and this was Mr Mitchell’s point. the Government might well have had more flexibility if it had gracefully accepted the retention of the ETS. 

Perhaps I’m wrong. I often am. But emissions policy is emerging as another Government mess.      


Wednesday, September 03, 2014

Ramblings – abolition of the mining tax, superannuation and the long term

So, the Australian mining tax has finally been repealed. The passage came after the Government struck a deal with the Palmer United Party and was supported by the Day/Leyonhjelm block. I suppose that we can call them a block. They generally vote together. 

The passage is a reminder of the need to stand above the daily turmoil. The Government has been forced to compromise since it doesn’t have ultimate unfettered power, but that has been the case for much of the time since Federation. The Howard Government might still be in power if it had not won control of the Senate and consequently found itself able to push through legislation regardless.

The deal came at the price of what is, effectively, an indefinite  deferral of the increases in deductions of compulsory superannuation that were intended to fund longer term retirement incomes. Labor and the Greens have attacked this quite savagely, as you would expect. However, my simple point here is that the business of government does go on.

You would think listening to some of the comments from the business lobby and others that this was not the case. It’s the same type of criticism and commentary Julia Gillard had to deal with when she depended on the New England independents for survival and passage of legislation. It was silly then and is silly now.

What is really important is the longer term impact of the measures being passed. We tend to lose sight of this in the daily cut and thrust. The mining tax itself was no longer very important beyond its role as a political symbol and election issue.

In simple terms, it was a tax designed to extract a share of super profits in a boom now passed. The problem lay in the way that that the then Government hypothecated hypothetical revenue to specific expenditure proposals. The new Government was committed to the tax’s removal, but the real fight was around the future of the expenditure proposals linked to the tax.

All the Government had to do to avoid a fight on the tax as such was to deal with it and associated expenditure items as separate issues. Repeal the tax; whatever the original arguments, it doesn’t make sense. Tick. Now deal with the associated expenditure in a budget context. Instead, the Government locked itself into a trap of Labor’s making by attempting to deal with both sides of Labor’s equation at the same time.

Now we have the effective ending of the Keating vision of a system in which the Government facilitated a compulsory saving program for future retirement needs. Lord knows, I am not a Keating supporter. I have a visceral dislike of the man based on the symbolic drums he banged, as well as my perception of his arrogance. That vision is largely gone now.

So what have we gained?

The Government has gained some extra tax revenue because, If my understanding is correct, more tax will be paid on incomes. I count retention of the low income super contribution as a plus since it appears (again I stand to be corrected) that this addresses a situation in which the current tax on superannuation is higher than the personal tax rate. The abolition of the mining tax may be a small plus as well since it yielded little revenue and was complex.

I do not count retention of the school kids bonus as a plus. This is just another of those patch work quilt of ad hoc welfare measures that fall in the “it seemed like a good idea at the time” category.  Our welfare system does need rationalising and simplification, if not on the lines proposed by Mr Hockey’s Commission of “Audit”. It also needs a fundamental re-think as to rationale. Keeping the school kids bonus does not help the process, although its real importance is not high.

So what have we lost? Obviously I think that we have lost or at least deferred the chance to build  better retirement support system. However, it seems to me that we have incurred two further costs.

The first is that we are going to be paying more in old age pensions. This sees clear, although I couldn't put a number on it. The second is a further erosion in trust in Government at the most basic personal planning level. I think that’s the biggest long term cost.

Tuesday, September 02, 2014

A note on dividend imputation

I hadn’t realised that New Zealand, Malta and Australia are apparently the only countries to have dividend imputation built into their tax systems. For those who don’t know dividend imputation, it is intended to reduce double taxation on the same profit stream.

Prior to dividend imputation, a company would pay tax on its Australian earnings. If it then paid a dividend to shareholders on post tax profits, that dividend was taxable in the hands of shareholders. So every dollar of company profits distributed as dividends was taxed first at the company tax rate and then the personal tax rate.

This was seen as having certain negative effects. To begin with, it was inequitable. It provided an incentive for the the use of tax structures such as trusts designed to avoid double taxation. It also arguably created a market distortion by skewing investment returns against dividends in favour of interest bearing securities.

The system that Australia introduced allowed shareholders to effectively claim an income tax credit on dividends paid from Australian profits. Tax was now payable only on the difference between the company tax paid and the shareholder’s marginal tax rate. For example, if the company tax paid represented 28% but the individual’s marginal tax rate was 40%, the dividend was taxable at 12% in the hands of that shareholder.

There is now pressure to remove dividend imputation as part of possible tax changes targeting taxation “concessions”. As with all these things, the immediate effect of removal is likely to be greater than the original introduction. 

I do not have the knowledge to track the detailed effects since these depend in part on the varying tax positions of individuals and entities. However, on the surface, the removal of dividend imputation is likely to have considerable impact on the return from shares for certain classes of investors. There are also likely to be differential impacts on share prices. The impact here would be greatest for shares and dividends in companies earning the majority of profits in Australia since dividend imputation only applies to dividends paid to Australian shareholders from Australian profits.

Interest rates were relatively high at the time dividend imputation was introduced. In these circumstances, dividend imputation had a considerable impact on dividend versus interest returns, encouraging a rise in share prices. Interest rates are now so low that the immediate asset price impact of the removal of imputation is likely to be muted. However, as interest rates rise (and they will), there are likely to be considerable asset price effects.     

Monday, September 01, 2014

Monday Forum – the Ukraine, a new war on terror and corporate investment

I accept that I have been very slow in posting. linesmen In the meantime, kvd sent me this photo. It was, he suggested, the Tesltra lineman and his apprentice inspecting kvd’s ADSL connection!

The Ukraine

The international scene is a proper cheer up, just at the moment.

I haven’t commented on Ukraine for a while. I guess that my core feeling is one of sadness as exemplified by this story. This is a proxy war in the sense that those in the east have become victims of games played in Kiev and Moscow. Mr Putin can’t let the rebellion that he helped inspire and supported fail. That’s clear. But how far does he go and at what price?

In all this, there is one point that I noted. Europe is so dependent on Russian gas that it constrains their political freedom. I suspect that if it were not for that, the European response would have been far more robust.

I have always been cautious in an Australian context about arguments that say we must maintain capacities for strategic reasons. It does lead to special pleading. However, I do wonder now whether we have actually got to the point that the country might grind to a halt if the sea lanes on which we depend were interdicted to any substantial degree.

The Middle East and the New War on Terror

Meantime, the Middle East can best be described as a mess. Here I do wonder about Government responses.

Back in June 2007 I looked at terrorism and related issues in Moral Courage, Fear, Technology and the Decline of the West. It’s quite a good post and still relevant today.

I am not saying that Australia should not be providing a degree of military support against the Islamic State. I am concerned about the proportionality and common sense of some of the rhetoric and of the domestic measures that the Government is proposing to protect us all from home grown jihadists. To my mind, the side-effects from the preventative medicine are likely to be worse than the cure. 

Investment Strike and the Corporate Tax Rate

Over the last few weeks there has been quite a bit of commentary including from Australian Reserve Bank Governor Glenn Stevens on the failure of Australian business to invest. Animal spirits appear to be lacking.

In the days when I bought shares, I aimed for a mix of dividends and capital gain. That made sense in a more stable business environment since you could largely depend upon reinvestment in the business to increase value over time. It seems to me that that is no longer true. When any business pays out to much of its profits in dividends, its investment capacity declines. It becomes worse when the decline in investment seems to be associated with an absence of investment opportunities.

All this makes me cautious about supporting further cuts in business taxation at this point. The argument usually runs that if you reduce business taxes  then you will increase investment. That’s far from clear at this point.