Archive for February, 2009

Queensland election 2009: In a Galaxy Poll far far away

State elections are not everyone’s cup of tea. Andrew Bartlett hates the “too many photo ops and soundbites masquerading as policies”. The Queensland election has these blights and is also taking a dangerously presidential turn. The focus is increasingly on the leaders Bligh and Springborg rather than their policies. The attached photo, which appears in the Brisbane Times, makes the two party leaders look like pugilists about to go 15 rounds with each other.But if state politicians are putting it on then so are the mass media. Channel Nine delights in presents an almost nightly litany of government blunders while Gary Sauer-Thompson notes News Ltd is infatuated by “the LNP is gaining on Bligh” meme. The Courier-Mail Galaxy poll published yesterday bought into the horserace analogies so beloved of opinion poll analysis with its talk of “neck-and-neck” and “down to the wire”.Yet despite Labor’s “10 point freefall”, they should still win the election thanks to its hold in the south-east. The size of the LNP’s task in Brisbane is graphically represented in this excellent map by Ben Raue at The Tally Room. There are 38 seats in the Brisbane metropolitan area and 36 of them are currently held by Labor. As Raue points out, with just 45 seats needed to form government, that already puts Labor “within spitting distance” of a majority.

It is likely that a number of these Brisbane seats will fall to the LNP. Assuming the Galaxy poll html is a reasonable point in time reflection of voters’ intentions and there is a 50:50 split in two party preferred, that would represent a 4.9 percent turnaround since 2006. There are 12 Labor seats that would fall if this is a uniform swing – but the stark reality of the numbers means that would still leave the government with a comfortable working majority.

Possum (Scott Steel) publishes the complete Galaxy poll data at Pineapple Party Time (the Crikey group blog devoted to the Queensland election). With a low sample size of 800 people, there is a significant 3.5 percent margin of error. However, apart from whimsically suggesting that the data marked “NFI” (No further information) actually stands for “No Fucking Idea”, Possum leaves the analysis of the poll to his stablemate William Bowe.

Bowe begins by turning to his home state of WA for comparison. He analyses a Galaxy poll prior to the WA election last year and points out similarities and differences between the two states. While the WA Coalition lead on health issues was replicated by the LNP, Labor polled better on water, education and law and order in Queensland. They also did well in roads and public transport, issues not in the WA survey, However Bowe cautions the Queensland survey didn’t appear to include an important question that was asked in the WA one: “Has the decision to call an early election made you more or less likely to vote for the Labor Party?” In WA over a quarter of the respondents said the early election decision made it less likely.

As I’ve written before, an early election is Labor’s biggest danger. Malcolm McKerras predicted earlier this year Anna Bligh would be re-elected Premier (despite a 50:50 two party preferred vote) but he also cautioned she would call an early election “at her peril.”  Many would agree with the Queensland Greens who say Bligh’s decision to hold an early election is bad for democracy. They want fixed four year terms and want to stop governments from rigging elections “by calling them at a time that takes advantage of wavering public opinion.”

This election is about how Labor could lose government, not how the LNP can win. As Brian Costar writes, Queensland is beset by serious infrastructure deficiencies in water, health and transport infrastructure. The advantages of incumbency have turned into the staleness of entrenched power. According to LNP supporter Russell Egan, Springborg has one huge advantage in this election: “he hasn’t been in government for 11 years and doesn’t have to explain why not a single inch of new highway or rail has been laid for 11 years, why our hospitals are clogged with elective surgery waiting lists and schools are being outgrown by ballooning outer suburbia.” Three weeks tomorrow, the voters will get their chance to vent their anger. Bligh will be hoping she gets away with a bollocking, but not the sack.

February 27, 2009 at 2:36 pm Leave a comment

Bangladesh mutiny is test of Sheikh Hasina’s government

Long running complaints between branches of Bangladesh’s military has broken out into full scale mutiny in the last two days claiming at least 50 lives. What began as a shootout in the capital Dhaka has spread to towns across the country. While the main reason for the mutiny is a pay dispute, it is also a test of power for Prime Minister Sheikh Hasina who has only been in the job a month. Ranjit Bhaskar says the fact the army had to quell the uprising just weeks after December’s election is “an important reminder that the country’s political situation remains complex and fragile despite the restoration of democratic rule”.The trouble started over pay dispute in the paramilitary Bangladesh Rifles (BDR). The standoff at BDR headquarters began yesterday when troops took dozens of high-ranking officers and military brass hostage after a gun battle erupted between rebels and loyal police and troops that killed 50 people. The dead included passers-by caught in mortar fire.  The BDR had reportedly accepted an offer of amnesty from the prime minister and agreed to lay down arms on Thursday. But the fighting resumed later in the day.The BDR is the country’s border security and anti-smuggling force. Known by the grandiose nickname of “The Vigilant Sentinels of Our National Frontier”, the force was set up after partition in 1947 as a descendent of the British East Pakistani Rifles. In 1971 it fought for the liberation of Bangladesh from West Pakistan and emerged as the new country’s leading paramilitary force. There is disagreement over exactly how big it is. The BBC thinks it is 40,000. The Guardian today was reporting 42,000 posted across 64 camps whereas Al Jazeera claim there are “50,000 paramilitary soldiers”. Meanwhile, BDR’s own website says they have a total manpower of 65,000 troops.

Whatever the size, it is a significant security organisation the government needs to control. According to police reports, BDR members had revolted in 12 border districts, a quarter of the zones where they are stationed. The initial revolt started in Dhaka and then fanned outwards. One local police chief reported heavy fighting at a BDR training centre in the southeastern town of Satkania. Another talked of indiscriminate gunfire in the northeastern Moulivibazar district where the commanding officer fled the camp. Violence was also reported in Chittagong and Naikhongchari in the south, Sylhet in the north-east, and Rajshahi and Naogaon in the north-west.

Back in the capital, the soldiers initially agreed to surrender after the government said it would grant amnesty and discuss their grievances. But it was little surprise to hear that fighting had resumed later in the day. The mood was full of resentment about army entitlements as one rebel soldier told television reporters. Unlike the army, the BDR is under the Home Ministry and has a different pay scale. “Army troops are sent abroad to work in UN peacekeeping missions and they get fat salaries,” he said. “But they don’t take border guard personnel for peacekeeping. That’s discrimination.”

A government spokesman said mutinous soldiers would be treated harshly. Bangladesh’s new Prime Minister Sheikh Hasina and Cabinet members met in an emergency session today as the Dhaka standoff entered a second day. Some diplomats speculate an ulterior motive of the violence is to test Hasina. She ended a military-backed administration last month and is the daughter of Mujibur Rahman. Rahman won an election in 1970 and led the country to independence one year later which earned him the nickname of Bangabandhu “friend of Bangladesh”. However in 1975 his own army officers assassinated him and 23 family members. Hasana and her sister were away in Germany at the time, and were the only ones left to carry on his line.

Since Bangabandhu’s death, Bangladesh has been dominated by military dictatorships, overtly or disguised by stooge leaders. Hasina inherited the leadership of her father’s party and suffered imprisonment at the hands of several Bangladesh rulers. She was elected Prime Minister in 1996 after two disputed elections and ruled for five years. She was defeated in a landslide in 2001 but continued to lead the party despite criminal charges of extortion and murder. The High Court dismissed all the charges last year and she returned from exile in November to fight the election which she won easily. But defeated Premier Khaleda Zia rejected the result saying the poll was ‘stage-managed’.

Pranab Dhal Samanta writing in Indianexpress.com said the BDR was heavily penetrated at the lower and middle ranks by affiliates of Zia’s party. There are also links between Zia’s brother and a disaffected BDR general. It doesn’t take much to join the dots. Samanta believes the force is now controlled by disgruntled military officers who are affiliates of Zia’s party. “A spectre of instability coupled with suspicious battles within the Army…and a new government wanting to try 1971 war criminals could rapidly trigger an unexpected crisis in Dhaka,” he writes.

February 26, 2009 at 11:57 am 2 comments

Max Factor: Pauline Hanson runs in Beaudesert

As even noted in Singapore, Pauline Hanson is standing as a candidate in the Queensland election. Appropriately for a walking headline, Channel Nine News said celebrity agent Max Markson would accompany Hanson when she unveils her candidacy in the town (and seat) of Beaudesert next week. While Markson denied he encouraged Hansen to run, he admitted he was handling her media affairs. With neither an election website nor a publicly available phone number for Markson, it promises to be yet another unorthodox Hanson media campaign. The Brisbane Times speculated Hanson would either sell her candidacy story to magazines and television or else make a pitch for a reality TV show.The news came just a week after it was announced Cate Blanchett could play the lead role in a biopic about Hanson. Melbourne filmmakers Leanne Tonkes and Steve Kearney are calling the project “Please Explain” and starts from her time running a fish and chip shop and ends with her on Dancing With the Stars. The filmmakers claim it will be “wry, not vicious”. With a view to the American market, Tonkes compares Hanson with Sarah Palin. “She [Hanson] is naturally sceptical of what we are doing,” said Tonkes, “but we need to find out the person behind the media front to make a compelling story.”

Hanson has always been a compelling story and she and the media have long been involved in a complicated dance. She began her public life as an independent Ipswich city councillor where she quickly found she possessed skills in communication and listening to people. However she was out of a job after just a year when elections were called after council amalgamations in 1995. She joined the Liberal Party and comfortably won preselection for the ultra-safe Labor seat of Oxley. Prior to the 1996 election she wrote a letter to the Queensland Times where she complaining about Aboriginal welfare. “I would be the first to admit, not that many years ago, the Aborigines were treated wrongly but in trying to correct this they have gone too far”, she wrote.

In some respects what she said was mild, compared to other Queensland Coalition candidates. The National candidate for Leichhardt Bob Burgess described citizenship ceremonies as “dewoggings” while then-fellow Nat Bob Katter complained about aboriginal funding and the influence of “slanty-eyed ideologues who persecute ordinary, average Australians”. Both Burgess and Katter got re-elected with above-average swings.

Nor were they disendorsed before the election, unlike Hanson. When Ipswich Labor councillor Paul Tully brought the Queensland Times letter to national attention, she was promptly disendorsed by John Howard when she would not retract her position. But the public exposure backfired. The newly independent Hanson won the sympathy of the locals who saw her as a victim of political correctness. Still listed as Liberal on the ballot paper, she took the seat with a massive 19 percent swing.

By now, the media spotlight was firmly on Hanson as the focus of a race debate. Helen Dodd’s authorised biography questioned whether the media’s aim was to sensationalise the idea racism was alive and well in Australia. Dodd says the debate never occurred among average Australians but that it was “written, orchestrated and performed by the media”. Hanson also bought into the argument. In September 1996 she stood up in front of an almost empty parliament to make her maiden speech. She spoke of money wasted on Aborigines, condemned the Mabo judgement, attacked economic rationalism, called for the abolition of multicultural policy and warned Australia was being “swamped” with Asians. She channelled Menzies’ Forgotten People speech with her call to represent “common sense and the mainstream”.

It was incendiary stuff, and it connected with many. She proved a hit on television and talkback radio opening up a Pandora’s Box of forbidden opinion. Her approval rating soared and for much of Howard’s first term, Hanson controlled the political agenda particularly over the Wik judgement. While the Nationals recognised her as a threat, Howard implicitly condoned her and her anti-Asian attitudes were noted in Jakarta and elsewhere. In 1998 her newly founded Pauline Hanson’s One Nation party (significantly, the first Australian party to be branded with its leader’s name) contested the Queensland state election. They attracted 23 percent of the vote and won eleven seats with the help of Coalition preferences.

As Margot Kingston noted, Hanson had ruptured the stability of political discourse. Only then did John Howard realise how serious the phenomenon was becoming. He did a deal with independent Senator Brian Harradine on Wik and resolved to put One Nation last in preference voting in the impending federal election. But Hanson had to move to fight that election. A redistribution made Oxley unwinnable. She would have been a certainty to be elected to the Senate, but instead chose to fight in National heartland in the new seat of Blair. Placed last on the how-to-vote cards, she would have needed 40 percent of first preferences to win. Abandoning most media conventions and egged on by a massive press gallery, Hanson’s campaign (brilliantly chronicled by unlikely ally Kingston in “Off the Rails”) fell just short with 37 percent and One Nation’s only victory was a Senate seat in Queensland.

The party didn’t take long to unravel without its raison d’etre in parliament. Hanson’s star was on the wane by 2001 and she narrowly failed in a Senate tilt. Earlier that year Hanson outlined her policy towards boat people: “You go out and meet them, fill them with food and water and medical supplies and say ‘Go That Way’”. Howard was listening and skilfully manipulated the fear and loathing generated by the Tampa crisis to wedge the Opposition whose polls lead quickly evaporated. Hanson complained the Coalition had stolen her refugee policy. She was gone but the views she left behind went mainstream.

In 2003 she was sentenced to three years prison for fiddling party membership numbers but had the sentence quashed on appeal. A year later she quit politics after another Senate loss. But she simply could not kick the habit. She was back again in 2007 with a new party again featuring her name “Pauline’s United Australia Party”. She recontested the Queensland half-Senate election and took 4.16 percent of the vote. There was little surprise when she announced her candidacy for this year’s state poll. As Jeff Sparrow puts it, “there’s something of Mike Tyson in Pauline Hanson’s return: battered and past her prime, she’s drawn inevitably back to what she knows best.”

She is an experienced campaigner and her results over the years shows she has retained a loyal constituency. It is questionable whether much of it is in Beaudesert but Pollytics says her candidacy there has thrown a spanner in the works of the LNP’s hopes of retaining the seat. The current margin is 5.9 percent but sitting member Kev Lingard is retiring. 30 year old Logan City councillor Aidan McLindon is the new candidate. In 2005 McLindon was fined on a public nuisance charge. He barged on to the set of that year’s final episode of Big Brother during the announcement of the winner in a protest against the show’s exploitative nature. Hanson has now made McLindon’s life more complicated. If she can poll 20 percent and her preferences exhaust, the seat “could become marginal if a large swing away from Labor doesn’t manifest.” Meanwhile Hanson can walk away from the mess with a pile of money from Max Markson and plan her next campaign with the proceeds.

February 26, 2009 at 11:56 am Leave a comment

ASEAN ignores Burmese Rohingya refugee crisis

There seems little likelihood the plight of Burmese Rohingya refugees will be discussed at the ASEAN leaders summit this week. The Rohingyas plight came to international attention after Thailand admitted it had towed a thousand refugees out to sea. Vitavas Srivihok, Thai director of ASEAN Affairs Department, said talks about Rohingya would at best be marginalised to the “sidelines” of the conference and even then expects little by way of concrete outcomes. The conference’s contempt for Rohingya shows yet again ASEAN’s disinterest in human rights issues.

The Rohingya are a predominantly Muslim community who inhabit Arakan province of Burma. Their ethnicity and religion has made them a target of oppression by Burmese military rulers. In a move reminiscent of Nazi discrimination against Jews, a Burmese 1982 law stripped them of their right to citizenship. Rohingya also endure restrictions affecting their movement, education, and freedom to marry. They are often forced into slavery, have their land confiscated and suffer arbitrary arrests, torture, and extra-judicial killings. Today the Rohingya have become increasingly landless and jobless forcing many to flee the country.

The Rohingya refugee issue is now an international problem affecting Burma, India, Bangladesh, Thailand and Indonesia. One thousand people set off from Bangladesh in December and were detained and beaten when they landed in Thailand. Thailand exported the problem. The refugees were forced back to sea in boats without engines or food. Many died but hundreds more were rescued in Indian and Indonesian waters after several weeks at sea. On 7 January, 198  were found by Indonesian fishermen adrift off Aceh, in northern Sumatra. Indonesian authorities say they have rescued 400 Rohingya migrants while Indian authorities at Andaman Islands have said they have also rescued hundreds of refugees. India plans to deport them back to Bangladesh.

Thailand initially denied claims its security forces abused the refugees. However in an interview with CNN last week, Thai PM Abhisit Vejjajiva admitted security forces towed away the boats. Vejjajiva gave the unconvincing answer he could not pinpoint which government official approved the practice, but claimed he was fixing the problem. “All the authorities say it’s not their policy, but I have reason to believe some instances of this happened, said the PM. “If I can have the evidence as to who exactly did this I will certainly bring them to account.”

But while the world  judges Thailand harshly, Burma’s role should not be forgotten. Ye Myint Aung, the Burmese Consul-General at the Hong Kong consulate exposed what authorities really think of their minority in an extraordinary letter (pdf) addressed to the peninsula’s consular corps and media. In it, Aung denied Rohingya were Burmese. The Burmese, said Aung were good looking with “fair and soft” complexion. Rohingyas, by contrast had “dark brown” skin and were “ugly as ogres.”

Unfortunately, as New Mandala points out, the racism Ye Myint Aung shows against Rohingya is not unusual in Burma. New Mandala blames academics for stoking up “institutionalised chauvinism and historical memories built around communal conflicts from the last century”. Spurious research questioning their heritage gives people an excuse to distrust Rohingyas even though most have never met one.

But there are still groups working to improve the Rohingya’s lot. The Arakan Rohingya National Organisation wrote an open letter to the heads of ASEAN on the weekend which said Burmese persecution was a violation of the ASEAN Charter to respect human rights and international law. They called on the leaders to address the root cause of the Rohingya refugee problem and boatpeople crisis, pressurise Burma’s rulers to end human rights abuses and also urged Thailand to pay compensation to the families of Rohingya who drowned.

The international peak political body for Burmese ethnic groups is calling on the Australian government to push for democracy in Burma. The Ethnic Nationalities Council represents seven ethnic Burmese groups comprising 40 percent of the population. The Council’s vice chair, Dr Lian Sakhong, told Foreign Affairs and Immigration officials  Australia should call for multi-party talks on Burma “to put pressure on the military regime so that we can have a dialogue.”

Sakhong said the talks should lead to a negotiated settlement to return Burma to democratic rule and also end ethnic oppression of Rohingyas and other groups affected by the 1982 citizenship laws. “We need to review the constitutions that are adopted by the military, so that we can have a compromise,” he told ABC’s Connect Asia. “If we don’t do that, then the result will be another 50 years of civil war.”

February 24, 2009 at 12:26 pm 1 comment

Written in the writs: Queensland goes to the polls

Australia’s largest electoral event of 2009 (unless Rudd goes a year early) will finally come to pass on 21 March as the state of Queensland goes to the polls. Labor defends a massive lead in this election but most pundits expect their margin to be considerably reduced on election night. It was all Labor territory that Anna Bligh passed through today on the way to the Governor’s office in Bardon to issue the writs, as Mark Bahnisch noted earlier today. But the question is now how many Brisbane seats will still be Labor in a month’s time and whether they will still be in power at all.

While there has been a noticeable absence of recent poll data, an LNP victory is still seen as an outside chance. According to SportsPunter.com a party called “Labour” are $1.50 to win while an entity called the “Coalition” are $2.55. Perhaps given their spelling and failure to keep up with the existence of the LNP, SportsPunter.com ought not to be trusted with your money. Nevertheless the odds are a fair reflection of what the LNP needs to do to win.

Springborg’s party needs a uniform swing of 8.3 percent to take outright government. Of course, swings are rarely uniform and there will be variations within the mix that will make prediction difficult. Labor currently holds 58 of 89 seats, the LNP holds 25. Therefore the LNP needs to win 20 seats to form government. The One Nation seat will go to LNP; and of the independents, Dolly Pratt might lose to the LNP in Nanango while Liz Cunningham could lose to the ALP in Gladstone. The Greens hold one seat thanks to defector Ronan Lee in Indooroopilly but even a small swing will see LNP win that seat. Others to watch could be Morayfield (10.7 percent) and Kallangur (11.0 percent) which Labor could lose despite their huge margins due to retiring MPs.

Because of the electoral boundaries and redistributions, a 50:50 Two Party Preferred Vote will not be enough for an LNP victory or even a draw. But as Pollytics said, Queensland has Optional Preferential Voting (OPV) so preferences often exhaust. This makes two party preferred polling estimates potentially misleading. But it can be a devastating tactic. Beattie used OPV in the 2001 election to destroy a disunited opposition and again in 2006 in an attempt to marginalise the Greens.

However as the Brisbane Times points out today, what goes around comes around and Greens leader Bob Brown would not guarantee Premier Anna Bligh Greens’ preferences. BT says the local Greens are likely to recommend a “just vote one” strategy because of the Bligh Government’s failure to back down on its Mary River Dam project. It had more of a finger on the pulse than the Courier-Mail. When announcing the election today, the latter came out with this gem: “Calling the election today will result in a 27-day campaign, one day longer than the usual minimum 26-day campaign favoured by her predecessor.” Let’s hope for more incisive analysis than that over the next four weeks.

Another News Ltd apparatchik, Andrew Bolt, was more controversial. He said Bligh was going to the polls “before voters cotton on to her economic crisis.” While that seems a harsh judgement, Bligh herself gives credence to the idea the crisis is “hers” when she claims in her poll announcement video she would protect Queensland from the GFC.

But John Quiggin says the government is going early precisely because the people do not blame them for the crisis. He says the fact Bligh called the poll within a day or so of the credit rating downgrade was striking. Quiggin says the rating agencies are no longer trustworthy and the policies required to keep AAA “would have been economically disastrous”. This is a view shared by Nicholas Gruen and Joshua Gans. Gans, who writes at Core Economics, told Woolly Days that Queensland cutting infrastructure spending “would be disastrous for the economy”.

Ultimately I agree with Quiggin that as the party in power “[t]his election will be won, or lost, by Labor.”

February 24, 2009 at 12:23 pm Leave a comment

Queensland loses AAA credit rating

On Friday, Queensland became the first Australian state to have its credit downgraded from AAA to AA+. Ratings agency Standard & Poor’s (S&P) said the drop reflected the projected deterioration of the state’s budgetary performance and increasing net financial liabilities. S&P said there was nothing wrong with Queensland’s balance sheet but the new rating reflected significant decline in operating revenue due to global conditions and a large capital program. “Queensland’s financial performance remains strong but is no longer consistent with an ‘AAA’ rating,” said the agency.

The announcement came after Queensland Treasurer Andrew Fraser announced the outlook for a $1.6 billion budget deficit for the current year, just two months after the government predicted a modest surplus. Economic growth in Queensland is also forecast to slow further into 2009-10. Fraser blamed the global downturn, rising unemployment and the flood emergency in North Queensland for the revision. He now admits avoiding a recession would be “a close run thing”.

Queensland is the first state to lose its AAA credit. The most obvious implication is that Queensland will have to pay an extra 0.4 per cent in annual interest, around $200 million a year. State borrowings will cost Queensland $3.2 billion in interest next financial year and total government borrowings for the next three years will be $74 billion. Anna Bligh’s Government is forecasting job losses in the coming financial year and a growth rate close to zero. Writing in The Australian yesterday, George Megalogenis says Queensland’s collapse is one of Kevin Rudd’s darker nightmares because “a Queensland that does no better than the national average will, of itself, increase the risk of recession for the nation.”

Andrew Fraser defended Queensland’s position in a press release on Friday. He said the government would “hold its nerve” and retain its economic strategy outlined in December’s Major Economic Statement. He said the infrastructure program would deliver 120,000 jobs and accounted for 1 per cent of Queensland’s overall economic growth. “The economy needs the stimulus of the infrastructure spend, to support activity, support demand and support jobs as private investment evaporates,” he said. “We are choosing to put the interests of Queenslanders facing unemployment ahead of the political sanctity of a budget surplus.”

With early election speculation mounting, opposition leader Lawrence Springborg pounced on the announcement. He said losing the AAA rating was a financial disaster which will cost “the mums and dads” of Queensland hundreds of millions in increased interest payments and would affect jobs. “Labor should be ashamed of putting Queensland behind an economic basket case like New South Wales, which still has its AAA rating,” he said. “We are now the only State in Australia that doesn’t have an AAA rating. It’s embarrassing.”

Embarrassing or not, Dr Nicholas Gruen thinks it may soon spread to other states. Gruen is the CEO of Lateral Economics and writes for Club Troppo and is a frequent contributor to the Australian Financial Review. He told Woolly Days today that given the worsening state budget positions, it seems likely Queensland will not be the last to be downgraded. However he also defended Fraser’s position saying now was not the time to cut back on capital works. As Gruen wrote in the AFR in September (article is paywalled) “the electorate likes to see governments investing in the future. And the alternative – arbitrarily restricting investment whilst commuters nurse their resentments in traffic jams or waiting for late trains – is a political road to nowhere.”

Meanwhile UQ academic and economist John Quiggin believes an AAA rating is overrated and rating agencies are part of the problem. He says the global crisis exposed fundamental weaknesses in the way in which ratings are determined and adjusted. According to Quiggin, the likes of Standard and Poor’s and Moody’s have suffered credibility issues in the crisis and a need improvements to restore independence and transparency. “The privileged position held by these agencies can no longer be justified,” he writes.

In any case, downgrading is not just an Australian problem. Spain and Greece were downgraded earlier this year. Now the Telegraph.co.uk reports Britain too could be stripped of its AAA rating. The Telegraph says Standard & Poor’s have indicated it might downgrade Britain’s rating because of its asset protection scheme. The scheme provides insurance for “toxic debt” but the Telegraph warns the scheme leaves “the taxpayer exposed to losses on billions of pounds of bad loans made by the banks.” Yet as the article itself points out, it is very unlikely the UK Government will ever default on its debt commitments. A credit rating downgrade is not the end of the world.

Nicholas Gruen thinks credit ratings should be taken seriously but governments need to take risks in tough times. That means taking on projects and debts the private sector is shying away from. He says an obsession with an AAA rating is an obstacle to governments playing a rightful role in dealing with the economic crisis. “There’s a dynamic to fiscal responsibility and fiscal management,” he said. “Had the Queensland Government invested more in the easy times, it would be worth more now.”

Cross posted at the old Woolly Days

February 22, 2009 at 12:32 pm Leave a comment

Clutter’s underbelly: SBS and advertising

(cross-posted at the other Woolly Days)

I’m trying hard to enjoy the new second series of Underbelly on Channel Nine but am finding the number of ads are making it almost unwatchable. As a general rule, I avoid watching the free-to-air commercial channels live – their ad breaks are too destructive to the momentum of any program. So I pre-recorded Underbelly. But even then, I was annoyed by the number of times I had to fast-forward through the clutter of fifteen second ads. Ad buying in such numbers is huge business for broadcasters, but has the potential to destroy audience by over-saturation.

Advertisers themselves are aware of the problem. The dilemma is that few of them are prepared to pay premiums of up to 40 per cent to ensure fewer ads. Nine also admits there might be a problem but are hiding behind the early success of Underbelly’s 2.4 million audience. “We may need to take a position on the price of 15-second ads to reduce the clutter, “ Nine’s network sales boss, Peter Wiltshire told the SMH. “But judging from Monday night’s [ratings] performance, people are not too worried about it.” The question is whether 2.4 million will be still watching after another two or three weeks of this over-exposure.

Over at SBS the marketers are convinced high clutter ads are counter-productive. The state owned station has regulatory limitations on how much commercial airtime and claims this makes it attractive to advertisers. Last week they launched a trade press campaign called “avoid the clutter”. The campaign urges advertisers to switch to SBS because their commercial breaks are the shortest on Australian free-to-air (excepting ABC), and therefore, claims SBS, the advertisers will “get 83% better recall and an audience that’s 45% more engaged.”

The press release does not reveal where those percentages are sourced from, but it is a clever ploy to turn a necessity into a virtue. SBS has become a much savvier commercially-aware network under managing director CEO Shaun Brown. While his innovations since taking over in 2005 (most notably introducing in-program ads) have divided audiences, he has been steadfast in his desire to re-position the station. Under his leadership, ratings have become a critical measure of the station’s performance – though they remain stuck in the five to six percent region. Nevertheless, as his publicity manager Mike Field said of him, “Brown likes numbers”.

Brown first arrived at the station two years earlier as head of television. He told “The SBS Story” that when he started he found an organisation captive to the “Anglo arthouse” camp. He criticised the focus on documentaries and foreign movies. “I’ve got no problems with any of those programs, but they are not exactly defining of our charter,” said Brown. Instead he wanted an emphasis on locally commissioned content and a shift away from international acquisitions to meet its charter obligations.

The problem is a major point in the charter is the need to “contribute to meeting the communications needs of Australia’s multicultural society.” Firstly with radio and then with television, SBS has become the key cultural institution for ethnic communities in Australia for the last 30 years. But while movies, documentaries and sport have long been core multicultural programming on SBS TV, that type of content has been threatened by the new delivery platforms of the 2000s. New competitors in the form of Pay TV, broadband Internet, DVDs, digital TV and have led to a general decline in television viewing (particularly among the young).

SBS has responded in three ways; by programming more populist, imported English language shows (Mythbusters, Top Gear, South Park), enhancing the brand’s online presence, and most crucially, giving greater prominence to advertising. Brown defends these measures by saying the channel must become more relevant “for all Australians”. As he said to the Press Club in 2007 (attachment of speech): “ How can we be relevant, justify the public expenditure and meet our Charter obligations if only a fraction of Australians are tuning in?”

The question of public expenditure becomes relevant again later this year as SBS triennial funding comes up for renewal. The review has re-opened SBS’s whole raison d’etre. A couple of years ago, Paul Sheehan ruffled feathers when he called the station “an indulgence we don’t need”. He said the international news, sport and entertainment pay TV channels didn’t exist when SBS TV was conceived in 1979. Sheehan said the Government could raise billions by selling SBS and its digital spectrum. “SBS is now standing in the way of quality,” he said.

Brown disagrees and argues the new SBS model creates quality content. He says the advertising revenue generated by programs such as Top Gear cross-subsidises innovative locally commissioned content. For him, commercialism enhances the station’s public service mandate. SBS’s core principles of difference and diversity remain valid. In-program ads not only increase revenue but also allow for effective cross-promotion of other SBS programs. The problem is the station may sacrifice its distinctiveness in the search for all-encompassing advertising revenue. Perhaps the clutter argument is an acknowledgement is that less is more for a public broadcaster.

February 21, 2009 at 11:17 am Leave a comment

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