Archive for October, 2010

Israel commemorates 15th anniversary of Yitzhak Rabin’s death

20,000 people gathered in Tel Aviv’s Rabin Square overnight to commemorate the 15th anniversary of the assassination of Israeli Prime Minister Yitzhak Rabin. In the spot where Rabin was shot dead, President Shimon Peres told the crowd those favouring peace would prevail but preferred to blame Arabs rather than Israelis for the delays. “There are still those that wish to remove the Jews from Israel and that these people do not make the way to peace any easier,” he said. “The road to peace is long and difficult, and our neighbours are not helping us, but we will not be denied the hope for peace nor from attaining it”.

But it wasn’t a neighbour that killed Rabin, it was one of the family. Rabin was murdered after a peace rally on 4 November 1995 by an Israeli. His assassin was Yigal Amir, an ultra-nationalist Jewish extremist who opposed Rabin’s policy of trading land to the Palestinians for peace. Amir was sentenced to life in prison. Amir was egged on by the hostile spirit of the time with many political hard-liners branding Rabin a traitor for pursuing the Oslo Accords and some fringe extremists calling for his death.

The first native-born Prime Minister of Israel he was born in Jerusalem in 1922 of a Ukrainian-Belarusian family. Yitzhak Rabin grew up in a spirit of activism and both his parents were avid volunteers. After completing his studies at the School for Workers’ Children, Rabin spent two years at a kibbutz before enrolling in the Kadoorie Agricultural School, at the foot of Mount Tabor. The school was surrounded by Arab villages, and the daily routine included defence training and guard duty. While at Kadoorie, Rabin joined the Haganah, the Zionist military organisation.

During the war years Rabin served as a scout for Allied Forces units invading Syria and Lebanon against Vichy French Army units. But his friendship with British forces ended in 1945 when his battalion attempted to free 200 Jews from a British internment camp near Haifa. He was arrested in June 1946 and served five months in prison. In the Israeli war of independence Rabin safeguarded convoys of food, ammunition and medical supplies to the beleaguered city of Jerusalem. He also served as chief operations officer in the campaign to drive Egyptian and Jordanian forces from the Negev. At one point in the war Rabin met Nasser, then an Egyptian army officer, where they discussed the military situation and shared a bowl of fruit.

Rabin rose through the ranks to become the second ranking officer in the IDF. He was chief of staff during the Six Days War and it was his recommendation to carry out a pre-emptive strike. He left the armed forces after Israel’s total victory in 1967 and he served as Israeli Ambassador to Washington for five years. On his return he joined the Labour Party and was appointed minister of labour in Prime Minister Golda Meir’s 1973 government.

Protests over the poor preparation in the Yom Kippur war forced Meir’s resignation and Rabin was elected as head of the Labour Party, and prime minister. His first term of office was dominated by negotiations with Egypt and Syria mediated by Kissinger. He authorised the attack on the hijackers at Entebbe in Uganda in 1976 but was forced to resign a year later over reports his wife had a secret US bank account.

He returned to politics in 1984 as the Defence Minister in a new unity government. He held the post for six years during which time he was engrossed in trying to disentangle the IDF from the disastrous 1982 invasion of Lebanon. After the collapse of the unity government, Rabin took over the Labour leadership once more and won the 1992 election with the help of minor parties. His government made major advances in the peace process, signing the Oslo Accords with Arafat’s PLO in 1993 and the Israel-Jordan Treaty of Peace in 1994. He was also planning to concede the Golan Heights to Syria. Rabin, Shimon Peres and Arafat were rewarded with the Nobel Peace Prize in 1994 “for their efforts to create peace in the Middle East”.

But if his efforts were lauded overseas, they were detested by many at home. His assassin, a far-right law student named Yigal Amir was one of many deeply unhappy with Rabin’s peace moves. Amir appealed to the traditional Jewish legal concept of din rodef (law of the pursuer) to justify the murder. The tradition comes from the Talmud which allows a bystander to kill someone who is pursuing someone else with the intention of murder. Amir claimed din rodef applied because Rabin was endangering Jewish lives with his peace plans.

On the night of 4 November 1995, Rabin was attending a Tel Aviv peace rally in what was then known as Kings of Israel Square. At the end of the rally, Rabin walked down the city hall steps towards the open door of his car. Amir emerged from the crowd and fired three shots with a semi-automatic weapon. Two bullets struck Rabin and a third injured a bodyguard. Rabin was pronounced dead 40 minutes later at Tel Aviv Medical Centre.

While Rabin’s death was a huge shock and embarrassment for Israel, his Labour Party did not benefit from his death. Hardliner Binyamin Netanyahu was a surprise winner of the Prime Ministerial election that followed in 1996 and he set Israel on a path of conflict with its neighbours it has yet to fully emerge from. Rabin was no saint and his “anti Israel” attitude was completely exaggerated by his political enemies. But in the 15 years since his death, no Israeli leader has come close to him in reaching out past the pain of its history to confront the reality of Israel’s precarious geography.

October 31, 2010 at 9:41 pm Leave a comment

Robert Peel and the Irish Famine

In 1845 a devastating blight hit the Irish potato crop which was the sole diet of millions of its people. It wasn’t the first of its kind, but it was the worst. That is until the following year which was worse again. A third blight in 1848 left Ireland reeling in a way it has never fully recovered from. Millions died, and millions more fled to Britain and North America. To this day, the island of Ireland’s population remains two million less than it was in 1845. There was well meaning sympathy next door in the then-wealthiest country on earth, but this problem was ignored whenever a solution threatened to interfere with British financial interests.

The problem itself was slow to manifest itself at first. As digging of the potato crop progressed in the autumn of 1845, the news from Ireland grew steadily worse. By mid October, Reports from the local constabulary were growing that showed crop failure all parts of the country. In Monaghan and elsewhere it was remarked “potatoes brought a few days ago, seemingly remarkably good, have rotted.” 

It was this initial soundness that left everyone bewildered and then thrown into despair. What looked like a splendid crop rotted in front of farmers’ eyes. Wild arguments were put forward as it why it was happening. Some blamed static electricity in atmosphere generated by smoke from locomotives that had just come into use. Others pinned the culprit as “mortiferous vapours ‘ from ‘blind volcanos’ deep in the earth. Another school of thought blamed another recent fashion: the collection of guano manure.

The esteemed British Prime Minister Robert Peel was being kept abreast of developments and asked his good friend Dr Lyon Playfair to investigate. Peel appointed Playfair head of a Scientific Commission to see what could be done to save the Irish potato. Playfair had studied under Liebig but was a better courtier than chemist. Playfair asked the editor of the leading horticultural paper in Britain, Dr John Lindley to join him on his expedition.

In Ireland they were met by the eminent Irish Catholic scientist (a rarity for the time) Professor Robert Kane. Peel asked Kane to work with his Commission because he knew Kane was already investigating the problem and had written an important book about it called The Industrial Resources of Ireland. He would also provide the men with local knowledge and between them, Peel hoped, they would come up with a “dispassionate judgement” on the problem.

The Commission needed little deliberation. Members found evidence all too easily the problem was even worse than reported. They estimated half the crop was destroyed or about to be. Their mission became finding a method of preventing sound potatoes from rotting. But despite the involvement of Kane, fatal ignorance of Irish conditions proved the Commission’s undoing.

The traditional Irish method of storing potatoes was to keep them in a simple pit where the tubers could be partially protected from frost and rain. The Commissioners advised farmers to dry the potatoes in the sun and then put them in a trench covered in turf. There followed complication instructions on sifting packing stuff using unslacked lime, burnt turf and dry sawdust. There was a laundry list of tools required and opaque hints on how to make bread from the starchy material. 70,000 copies were printed of the instructions which helpfully suggested if the farmer did not understand them they should ask their landlord or clergyman to explain its meaning.

The Commission produced “four monster reports” to the Peel Government in three weeks. Hopes that the starchy material would provide sustenance were dashed as was the possibility of separating the good and bad bits of slightly blighted spuds. It didn’t matter what people did with them, the potatoes melted into a slimy decaying mess.

Senior landowners started warning Dublin Castle that the problem was getting out of hand. Lord Clare told the Irish Under-Secretary at the Castle he “would not answer for the consequences” if a famine occurred. With the year’s crop destroyed “how were they to survive to August 1846?” Clare asked. One person suggested the 12,000 police and army horse supply of corn be cut while the Duke of Norfolk said the Irish “should learn to consume curry powder” which he said had nourished India.

On 28 October 1845, the Dublin Corporation called for a committee to be set up to up advise the Lord-Lieutenant of Ireland Lord Heytesbury to adopt measures “to avoid calamity”. The committee led by Daniel O’Connell proposed corn exports be stopped and the ports thrown open for free import of food, rice and Indian corn. As well the country needed food stores and public works. O’Connell suggested a tax on landlords to pay for all this.

Heytesbury was unimpressed by the proposal. He used the time immemorial excuse of stonewalling politicians saying all the evidence was not yet in. “It was impossible to form an accurate opinion…until digging was complete,” he said. The plans needed to be “maturely weighed”. The Freeman’s Journal led with the condemnation of Heytesbury’s weasel words. They summarised his message as “let them starve”.

But if Heytesbury was an archetypal colonial fool, Peel was not. He knew that the crop failure meant the Irish must be fed on grain, so his answer was to repeal the Corn Laws. He also knew this was political suicide. A previous supporter the Duke of Buckingham had resigned from cabinet three years earlier rather than tolerate a slight modification to the laws. Now Peel was staring down a remedy that involved the abolition of duties on all “articles of subsistence.”

This was bad for Peel, but it would prove even worse for Ireland. In England, the vital oxygen of publicity for the fate of the Irish was deprived by the burning domestic issue of the laws. Farmers in particular stood to lose out if duties on imported grain were lifted. Worse still, opponents of abolition repeatedly denied there was any problem in Ireland at all and the change was unnecessary. The Tory Mayor of Liverpool refused to call a meeting for the relief of Irish distress while the blight was seen as “the invention of agitators”. To even express the opinion the blight existed, had the danger of setting the speaker out as a dangerous radical.

The abolition question produced a huge split in Peel’s own protectionist Conservative Party. There was an overwhelming majority in Cabinet against him. Despite being rolled on the issue, Peel refused to resign. Playfair produced his final report on 15 November. They said late rainy weather had made the problem even worse than before. But the Cabinet was unmoved. On 5 December peel tendered his resignation to Queen Victoria. After “ten famous days” opposition leader Lord John Russell told Victoria he too found it impossible to form a government.

The poisoned chalice was handed back to Peel who had to carry out Corn Law reform against his own party’s wishes. Ireland’s fate lay inhis hands but they were tied behind his back. As 1845 passed into the deep winter of 1846 power in Ireland slipped from his control to his increasingly powerful Treasurer Charles Trevelyan. Trevelyan had little sympathy for the Irish whom he felt did not help themselves enough. He worked to undermine Peel’s relief plans of Indian corn. The Irish gave up hope on English assistance and prayed instead for survival to a good harvest in 1846. It was this second failure that did all the damage. The British had charity fatigue second time round and Trevelyan shut down the relief operation.

Peel, meanwhile got his Corn Law repeals through at fatal cost. On 26 June 1846 the Whigs and Protectionist Tories combined to bring him down. He was defeated by 73 votes and resigned three days later. As an observer said at the time the majority “had as much to do with Ireland as Kamschatka”. But with Lord John Russell in power supported by Trevelyan of similar mind, any hope Britain would intervene in the calamity that followed disappeared. Britain practised genocide by omission, and set in motion the seeds that would lead to Ireland’s 20th century rebellions.

October 29, 2010 at 12:40 am Leave a comment

LNP’s balancing act as they head to drover’s dog election win

The Liberal National Party held a shadow cabinet meeting in Roma last week where they re-committed their support to the Surat Basin resource region at the centre of the $30b mining approvals given by Environment Minister Tony Burke last week. The fact the Queensland Liberal National Party is in favour of the massive coal seam gas developments might usually be assumed at a matter of course. The party has been pro-development in most of its guises through the years.

But the ruling Bligh Government is also in favour, desperate for what they will earn in royalties from the deals. The Opposition has been forced to play the green card in order to make a point of differentiation. They are adding their voice to concerns about the groundwater released during the gas extraction and possible damage to the water table. But the position hides tensions: the Nationals half are comfortable digging in for the farmers who grumble about wells on their properties while the more Liberal end of town wants to see the deals with China sealed as soon as possible.

There is a good reason for this haste; they want to be in power when the money arrives. Bligh’s trickery and the loss of Prime Ministerial power has left Labor is on the nose in Queensland. The LNP won 21 out of 30 Queensland seats in the 2010 Federal election. Queensland too will go to the polls in either late 2011 or early 2012. If all recent polls are to be believed, the LNP will win in some comfort. The party will need to adjust to the mindset of government over the next 18 months as it lords over the Queensland political scene and grapples with what kind of administration it wants to be.

The LNP is a hybrid party formed in mid-2008 after a long and difficult birth. Uniquely the Nationals were always the bigger entity in Queensland and their members were enthusiastically in favour of merger. After four straight defeats to Labor, they were anxious to regain power by any means. But the Queensland Liberals were much more divided with the right faction in favour but the moderates opposed. John Howard categorically rejected the idea of a stand-alone Queensland amalgamation in 2005. In 2006 Senator Barnaby Joyce pronounced the last rights on it in 2006 saying because it looked and smelled like a dead duck, it probably was one.

But two events in 2007 conspired to put it back on the agenda. When the Liberals did not contest Brisbane Central after Peter Beattie resigned, it angered the Nationals and Liberal Deputy Leader Mark McArdle publicly admitted they had failed the people of the electorate. Then in November, the Federal Coalition lost the election and Howard lost his seat. The biggest obstacle to merger was gone. When Lawrence Springborg replaced Jeff Seeney as Nats leader in January 2008, he pressed forward the amalgamation agenda over the head of opposing Liberals.

They outmanoeuvred their opponents in several key ways. Firstly they got the Federal MPs onside by guaranteeing them pre-selection for the next election. Secondly the two party presidents (who were both in favour of merger) conducted polls of branch members which found an overwhelming majority in favour of merging. Thirdly the new party would become the Queensland division of the Liberal Party and an affiliation with the federal Nationals.

Nats President Bruce McIver set a timetable for amalgamation calling a constitutional convention for 26 July 2008 to make a decision. Pro-merger Libs agreed to meet on the same day. Two days before the appointed date state council narrowly voted to postpone, but the pro-merger faction went to the courts and secured a Supreme Court judgement to ensure it went ahead. At both conventions on 26 June, the merger was approved. McIver was elected president and former Libs state president Gary Spence became deputy. Springborg was anointed leader of the combined entity with McArdle his deputy. It wasn’t until eight months later the Federal Council of the Liberal Party ratified the new LNPQ as its Queensland Division.

Electoral desperation had driven the two parties together but it did not pay immediate dividends. Anna Bligh clung to power in the 2009 state election despite losing eight seats. Springborg resigned after his third defeat and handed over the reins to former dentist John-Paul Langbroek. Langbroek is an ex-Liberal and his succession wasn’t an easy one, winning possibly by as little as one vote.

Almost 18 months later, the rumblings in the cabinet room continue with Infrastructure and planning spokesman David Gibson resigning from the frontbench after Langbroek called for a ministerial reshuffle without first consulting colleague. Tim Nicholls, who Langbroek defeated for the top job, is not ruling out a challenge. But Nicholls is just noise. Only one of two people can become Premier in the next Queensland election and Nicholls is not one of them. Given Labor’s latest catastrophic polling in Brisbane, neither is Anna Bligh nor anyone in the party that might overthrow her.

In what is shaping up to be a drovers dog election, the next Premier of Queensland will be either JP Langbroek or Lawrence Springborg. The “Borg”, as he likes to be known, remains an extremely powerful as deputy and the unofficial head of the Nationals wing of the party. But three defeats have shown he is not trusted in the metropolitan areas. It is up to the more likeable Langbroek to step up in the next 18 months to show he is Premier material.

I saw signs of it when he made a major speech here in Roma last weekend when the Shadow Cabinet met in town. Springborg and Nicholls were notably absent, but the rest of Langbroek’s cabinet had the steely determination of a party about to seize government and were looking seriously at the problems that will bring. Philosophical differences means the marriage of the Nats and Libs remains fragile but the smell of victory should keep them away from the divorce courts in the short to medium term.

October 26, 2010 at 11:11 pm Leave a comment

Haiti struggles to deal with major cholera outbreak

Haiti’s capital Port-au-Prince is bracing itself for an outbreak of cholera as the disease which has killed 200 in the countryside makes itself known in the city. The five confirmed cases in the capital are among more than 2,000 people who were infected in an outbreak mostly centred in the Artibonite region north of Port-au-Prince. At least 208 people have died with that figure likely to rise in the country’s first outbreak of cholera since 1960. The outbreak is the latest disaster to hit the poverty-stricken country still struggling to recover from the devastating 7.0 earthquake which left much of the country in ruins last January.
(photo: David Darg)
Medecins San Frontieres sent assessment teams to the Artibonite region including the coastal town of St Marc, 70km north of Port-au-Prince. MSF said St Marc’s hospital was becoming overcrowded and does not have the capacity to handle a cholera epidemic. MSF staff are giving patients an oral rehydration solution to replace fluids lost from diarrhoea and vomiting symptoms of a cholera infection. Patients too sick to drink the ORS are given infusions intravenously. “The most important thing is to isolate the cholera patients there from the rest of the patients, in order to best treat those people who are infected and to prevent further spread of the disease,” the local MSF coordinator said. “This will also enable the hospital to run as normally as possible. We are setting up a separate, isolated cholera treatment centre now.”

David Darg, of the US-based Operation Blessing International, drove the two hours from Port-au-Prince to find a “horror scene” at St Marc hospital. Darg said he had to fight his way through the gate through crowds of distressed relatives while others carried dying relatives into the compound. “Some children were screaming and writhing in agony, others were motionless with their eyes rolled back into their heads as doctors and nursing staff searched desperately for a vein to give them an IV,” he said. “The hospital was overwhelmed, apparently caught out suddenly by one of the fastest killers there is.”

Cholera is an acute intestinal infection caused by bacteria carried in human faeces and can be transmitted by water, some foodstuffs and, more rarely, from person to person. The main symptoms are watery diarrhoea and vomiting, which lead to severe dehydration and rapid death if not treated promptly. According to the World Health Organisation, there are an estimated three to five million cholera cases every year causing between 100,000 to 120,000 deaths. The WHO is worried about the emergence of a new and more virulent strain of cholera that now predominates in parts of Africa and Asia, as well as the unpredictable emergence and spread of antibiotic-resistant strains. And because brackish water and estuaries are natural reservoirs of this strain, cholera could increase where there are rising sea levels and increases in water temperatures.

While it is too early to tell what is causing the Haitian outbreak, conditions in the IDP camps remain primitive and conditions were ripe for disease to strike in areas with limited access to clean water. 230,000 people died in the quake. 1.2 million people were displaced as of August 2010 and a further 1.8 million are affected. According to a post-earthquake fact sheet produced by USAID, the majority of IDPs in Artibonite are “residing with host families, straining resources and creating housing space issues for both groups.” It noted deficiencies in disease reporting processes. As well there has been a mass migration of 120,000 people from Artibonite to Port-au-Prince in search of a better life.

So far there has been no reports of cholera in the camps, but if it does a public health crisis could be imminent. “It will be very, very dangerous,” Claude Surena, president of the Haitian Medical Association, said. “Port-au-Prince already has more than 2.4 million people, and the way they are living is dangerous enough already. Clearly a lot more needs to be done.”

October 24, 2010 at 9:12 pm Leave a comment

BTEX throws a spanner in the Queensland CSG works

The fraught relationship between mining companies and landowners in rural Queensland took another blow with the mysterious discovery of an illegal poison in eight Origin Coal Seam Gas drilling wells about 350km west of Brisbane. The find of the banned toxic chemical BTEX last week comes just months after the Queensland Government ordered Cougar Energy to shut down its Underground Coal Gasification plant near Kingaroy when water tests detected similar compounds of benzene and toluene in groundwater monitoring bores.

CSG is a very different technology to the unproven UCG. However, the BTEX find puts a cloud over an industry that is about to take off in the mineral-rich Surat Basin energy province. On Friday Federal Environment Minister Tony Burke gave conditional approval to the GLNG (jointly owned by Santos and Petronas) and BG plan to export $30 billion of CSG to Chinese markets via Liquefied Natural Gas plants in Gladstone in the coming 20 years. Neither company were directly affected by BTEX find which occurred at eight Australia Pacific LNG (jointly owned by Origin and ConocoPhillips) coal seam gas sites in an area between Miles and Roma.

The industry has been on the defensive over the outbreak. APLNG is likely to be the next major CSG player to have its environmental impact assessment tested by government. Their Environmental Impact Assessment has been with the Queensland Coordinator General Colin Jensen since January this year. Jensen has been holding off his decision awaiting the Federal Government on GLNG and BG. Landholders in particular in coal seam gas areas have not been happy about the impacts to their land and water. Given that Burke imposed more than 300 strict conditions on GLNG and BG, it is likely the Origin/ConocoPhillips project will have to address these also.

The BTEX contamination is an added headache. The problem came to light last Tuesday when Origin released a statement to the ASX saying they had found traces of BTEX in fluid samples taken from eight exploration wells. They said they advised relevant landowners, Western Downs Regional council (but not apparently the Roma-based Maranoa Council which was also affected) and the Queensland government of the find. The company told Queensland Minister for Sustainability and Climate Change, Kate Jones there was no evidence of environmental harm or risk to landholder bores. However Jones has requested confirmatory testing by an independent service provider.

The finds come just days after the Queensland Government banned BTEX from all coal seam gas operations. Minister for Natural Resource Mines and Energy, Stephen Robertson told parliament BTEX petroleum compounds were not used in Queensland CSG operations but have been used in overseas oil and gas operations in the fraccing process. Fraccing is the controversial process that involves pumping fluid at high pressure into a coal seam to fracture the seam to allow gas to flow readily into gas wells. The Australian Petroleum Production and Exploration Association say chemicals make up less than 1 percent of fraccing fluid and the risk to public health at those levels was negligible.

Which is just as well, as BTEX is extremely toxic. As well as being a cancer-causing compound, there is a documented history of harmful effects on the central nervous system. Because of the solubility of the majority of the BTEX components they are also prone to leaching into the underground waterways polluting areas larger than the original contamination site.

BTEX gets its name from its make-up: petroleum compounds containing benzene, toluene, ethylbenzene and xylenes. They are aromatic hydrocarbons which occur naturally in crude oil at low levels but in the 1970s the oil industry invested so heavily BTEX comprised 35 percent of all US gasoline (petrol) by 1990. When the EPA found excessive benzene concentrations in city air, the culprit was identified as the aromatics. While it was subsequently decreased, it still makes up a significant component of petroleum.

Origin say they have no idea how it was found at their wells last week but admit it may have been contained in lubricants used at the site. While its use in fraccing is illegal, they may be used on a drill bit which remains legal. APLNG’s executive general manager of oil and gas, Paul Zealand told the Courier-Mail the traces were barely detectable, did not enter the water table and may be naturally occurring. “It is isolated from water courses and livestock,” he said. “The company will undertake further testing in consultation with landholders in the coming days.”

October 23, 2010 at 10:55 pm Leave a comment

Australia will pay the price of Queensland’s asset sales

The Queensland Government furniture firesale continues as they soften the market for the crashlanding of QR National. In one of the first major share offerings since the GFC, the rail freight business is being pitched as a “growth story” for which they hope to get somewhere between 6.6 and 7.8 billion dollars. Bligh acknowledges dividends will be low and investors will not make a quick killing. What she does not acknowledge is that this slow long-term growth behaviour makes it ideal to remain in government hands.

There is another reason the sale is bad. Privatisation of any enterprise costs money and the cost is deducted from the sale price, effectively meaning the vendor pays for the transition. Australian and Queensland tax payers will lose tens of billions in long term revenues because of the sale. 

In the case of QR National the “book value” of the company is $7.4 billion which puts it in the ballpark of a fair price. But the book value does not measure other aspects of the company value including future earnings, goodwill and the power that comes from being the leading producing of freight services in Australia. It too must be in the billions of dollars.

QR National is the biggest of five assets to be disposed as Queensland buckles under financial penalties caused by its AA credit rating. With $52b of debt to service, international credit demanded these tasty morsels be released in downpayment. The unfolding financial disaster left Bligh was in a no win situation after her election. The only people that wanted these assets privatised would never vote for her. Her base detested the move and her credibility was shot to pieces after she introduced the sale without a mandate in the 2009 election. These are not trivial items.

QR National is huge. They are the largest rail freight haulage business in Australia by tonnes hauled and are particularly strong in coal haulage which has doubled in ten years. QRN operate 2,300 of dedicated railway lines across five states. Their future outlook is strong having invested $3.4 billion in three years keeping its rolling stock up-to-date while expanding its network. Another $3.8b is earmarked in expansion programs in the next two years.

QR National may be the jewel in the crown but the four other assets are also sparkly. Queensland’s largest cargo port, the Port of Brisbane could fetch up to $2 billion. Queensland Motorways operates the tolling franchise on the Gateway and Logan motorways and is worth about $4.5 billion. But as Professor Ross Guest told RACQ a likely sale price of $3 to $4b “would therefore transfer net worth from Queensland taxpayers”.

The fourth item up for grabs is Australia’s most northerly coal port: Abbott Point Coal Terminal. Abbott Point is 25km north of Bowen and is the quickest route to China. The port is valuable because there are few locations along Queensland’s eastern seaboard where very deep water is so close in-shore. Whitsunday Regional Council Mayor Mike Brunker said the terminal might go for half its $3 billion asking price because of crucial missing links in the railways that provide coal to the port.

The fifth asset is a 99-year licence for Forestry Plantations Queensland and it is already lost to the state. The smallest of the five, it was the ideal candidate to be first cab off the privatisation rank. The licence to manage, harvest and re-grow plantation timber on over 200,000 hectares of plantation lands was sold for $603 million at the end of June to American company Hancock Timber Resource Group. The price shows exactly how much privatisation costs.

Professor Gary Bacon, adjunct professor with Griffith University’s Environmental Futures Centre said the state’s forestry assets appeared to be going at bargain basement prices. He said if the land remained in government hands, the right to grow and harvest trees on it would be worth an estimated $1370 million. This figure came from parliamentary research commissioned by Bruce Flegg and while it is politically motivated, it shows a loss of $767m on unrealised earnings for the state. There are also environmental concerns. Hancock Timber Resource Group are the target of Greens ire over their Victorian operation which will clearfell much of the Strzelecki Ranges.

The QR National sale is likely to dwarf the Forestries sale in scale, impact and likely money lost forever to the state. In parliament on 7 October, Qld Treasurer Andrew Fraser called the QR National share offer a “historic moment for QR, for Queensland and indeed for the nation.” Apart from failing to recognise the impact of the GFC, it was this curious phrase “indeed the nation” that made it suggest Australian interest was an afterthought with the sale.

This is a major blunder given QR National’s size and reach into the important NSW market, a state which will recover its crippled mojo when the hopelessly compromised Labor administration is turfed out of power in 2012. The Queensland Government is expecting to receive something between about $3.6 billion and $5 billion in proceeds from the float, but once again the true value of future earnings is not included. Bligh is aware of all of this but has no option but to press on. Her fear of bankers appears worse than her fear of voters who don’t want the sales to go ahead. This death wish suggests she has little choice in the manoeuvre.

The coded message for help in the Queensland Government’s appeal in appears in the very name of the new entity “QR National”. Billions of dollars will be lost to Australia. If Bligh is unable to act in a notional national interest, then Prime Minister Julia Gillard ought to. She could buy the remaining assets for the cost of about a tenth of a stimulus package.

Tens of billions are leaving the economy which will not be compensated by the benefits of privatisation. Stephen Bartolemeusz in Business Spectator gives the game away when he says the value of QRN is in the privatisation alone. Given the company’s strong set of businesses with dominant market positions it ought to release considerable value. But “against that” he outlines reasons why investors won’t pay premium prices: The grandfathering arrangements to protect jobs, the retention of 25-40 percent Government ownership and a 15pc ceiling on individual shareholding.

It is these risk management strategies that drive increase of cost of buying, a factor the Federal Government would not have to worry about. What the Feds would have to worry about is being locked out of the “growth story” Bligh is now telling because they will have to deal with the consequences of private ownership decisions to the management of the Australian economy and environment.

Queensland’s troubles show federalism is a mess and economically unsustainable. If there really is a new paradigm in Canberra it should send a message to show how our state-based power structure is crippling Australia. In the “future directions for rural industries and rural communities” session in the 2020 summit two years ago, session chair Tim Fischer admitted their solutions saw them “almost demolishing the states”. It’s a worthy vision for 2020 – the quicker it happens the better.

October 20, 2010 at 1:34 am Leave a comment

Grog rations

After reading some of Grog’s Gamut’s first posts since The Australian journalist James Massola revealed his name, I was struck by the quality of the personal detail which informed his arguments. While it was always there to some degree, it seemed Grog suddenly had more freedom to back up opinions with detailed events in his life. As a result, I tweeted last night “Reading @grogsgamut’s blog with added personal experiences makes me think @jamesmassola may have actually done us all a favour.”

Grog, who has also returned to twitter, replied to me promptly: “@derekbarry they were always there – you just didn’t know my name.”

I didn’t dispute either of these points. But given the way his story was “always there” I was far from surprised the pseudonymous blogger was outed when it happened. Grog’s recent rise to prominence allied to the hints about his life in his work, made me sure sooner or later his identity would be revealed. He also tempted fate by trusting Massola not to reveal something he told him months ago. And surely he knew the writing was on the wall when he appeared at Canberra Media140 in September as embedded blogger “Greg”.

I was out of the country at the time so I missed that conference and I also missed much of the heat of the Twitter firestorm generated by “#groggate”. While it was good to see social media flex its muscles against the arrogance of older players, I thought it was amusing how enthusiastically they used the journalism cliché of “-gate”.

But I was still angry when I heard the Australian had outed him for no apparent reason. I foresaw the likely consequences of the article – his employers would force him to cease blogging and Australia would lose a useful critical voice. Though I’d never heard of the name of “Greg Jericho”, I’ve known about the blogger called “Grog’s Gamut” for some time. His bio was of a Canberra public servant who admitted he looked nothing like his Ralph Fiennes icon. Yet this unknown part-time writer was fast becoming one of the sharpest political writers in Australia. He excelled himself in his daily coverage of the 2010 election coverage. His 31 July tour de force “bring the journalists home” article attacking poor journalistic practices caused an ABC review and put him in the wider news. But it was the Murdoch empire that was Grog’s real target and it was only a matter of time before they would launch a counterattack.

Grog said he told Massola his name ten months ago, but it wasn’t until 27 September that he was “unmasked”. Massola’s article and that of his boss Geoff Elliot who defended him became notorious in the Twittersphere and a matter of much derision. While some of the criticism was over the top, neither journalist can have much complaint. They failed the basic test of newsworthiness, completely botching the justification for the outing, because there was none.

Massola’s first sentence, which should be the most important, revealed nothing new. “The anonymous blogger who prompted Mark Scott to redirect the ABC’s federal election coverage is a Canberra public servant,” he wrote. It served only as a false rationale for the name in the second sentence: “Greg Jericho, a public servant who spends his days working in the film section of the former Department of Environment, Heritage, Water and the Arts.” Massola passed the blamed to twitter speculation for the reveal and then attempted to justify it by saying Grog’s bias might impact the “impartial and professional” way the APS is run.

The unmasking did not sit well with the Twitterati (not least with Grog himself) who blasted Massola for his abuse of privilege, false emphasis, lack of principles and general lack of care of the consequences of his actions. Massola had violated a social norm. and his boss The Australian Media section editor Geoff Elliott was forced to come out and defend his man. Elliot only succeed in making matters worse with his pompous tone. “If you are influencing the public debate, particularly as a public servant, it is the public’s right to know who you are,” he said. “It is the media’s duty to report it.”

Elliot never made it clear why the public had such a right nor why it was his job to inform the public about that right, particularly when that paper has a long history of pseudonymous publication. It is not difficult to read between these few terse lines of an experienced news curator to see News Ltd’s purely political line at work aimed at destabilising a potentially dangerous enemy in a manner that was borderline unethical.

Fortunately the Australian Public Service proved Elliot and me both wrong. After a couple of weeks of silence, Grog was back online this week. He may not “deserve anonymity” that Elliot summarily stripped him of but he certainly deserved to continue to have a voice. His employers took into account he steers well clear of his own policy area. They took the sensible position no one of reasonable mind could confuse Grog’s views with those of his employers.

Reading the newest Grog/Greg musings show he remains fiercely partisan. His opinions haven’t changed but I detected a greater willingness to use life experiences as collateral because now he could do so without fear of consequence. Though Grog has denied this, it was this new explanatory power I sensed which made me think Massola had, quite unintentionally, done us all a favour.

October 16, 2010 at 3:09 am Leave a comment

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