Archive for November, 2011

God Speed

Like most people who like football, I was shocked to hear about the death of Gary Speed. Aged just 42, he enjoyed a successful playing career and settled into management exceedingly well as he knocked Wales into shape. He was found hanged at home on Sunday morning and while Cheshire Police say there is no suspicious circumstances, an inquest will be held into his death. Whatever the coroner finds, Speed’s death is an enormous tragedy that must be devastating and inexplicable for his wife and two teenage boys. Friends of the family say his marriage was happy and Speed was not depressed.

Just a day before he died, Speed exhibited no sign of problems when he appeared as a guest on the BBC’s Football Focus. Speed was in a “gaggle of Garys” with fellow former Leeds United player Gary McAllister. Both men won the old (and last ever) First Division with Leeds in 1992. It was the only time either would win the championship. Leeds slowly fell from grace and both Garys would move on to many other clubs. Speed started his professional football career at Leeds in 1988, aged 18. But as he said in Football Focus “If I wasn’t playing somewhere I’d had to move and go play somewhere else.” Speed would spend eight years at the club before bowing out with a League Cup final defeat in 1996.Speed supported Everton as a boy, so they were a natural club to follow Leeds. Everton boss Joe Royle paid £3.5 million and Speed repaid the debt by scoring 11 goals from midfield to be the club joint leading scorer. But lack of goals was Everton’s problem that year and they finished 15th. Joe Royle resigned at the start of the following season bringing club hero Howard Kendall back. Though Kendall made Speed his caption, the pair did not get on and he played his last game for the club he loved in January 1998. Famously he told a journalist“You know why I’m leaving, but I can’t explain myself publicly because it would damage the good name of Everton Football Club and I’m not prepared to do that.”Though never a flashy player, he was hard-working, versatile and rarely injured – attributes that made him saleable. Newcastle paid £5.5m for him and he played in successive cup final defeats in 1998 and 1999. By 2004, Speed was 34 years old and a hardened veteran of the game who had broken the record for the most number of premiership games. But he still had much to give. Bolton paid £750,000 to buy him. Newcastle chairman Freddy Shepherd took the money with mixed feeling saying it was always difficult to let a player like Gary go. “He is one of the best of the best,” Shepherd said. “He is totally professional and he always gave 100%.”

Speed spent another three successful years at Bolton rising to first team coach when Sam Allardyce quit. His 20 year tenure at the top table finally ended when he accepted a move to then Championship side Sheffield United. His love of the game made him a crucial member of that side until a rare injury finally ended his playing career in November 2008. He scored 109 goals in 677 games. Fans called him the “model professional”. He continued as a coach for United and was appointed manager just after the start of the 2010-2011 season. He lasted til Christmas when he landed the job of manager of his country.

Speed was a Welshman by quirk. His brothers and sisters were all born in England but his parents had Gary at Mancot, Flintshire, five miles from Chester. Speed played for Flintshire Schoolboys and cemented his Welshness with games for the youth and under 21 teams. He made his national debut in 1990 in a friendly against Costa Roca in front of just 5,000 fans at Ninian Park, Cardiff. Speed was a 76th minute substitute in a 1-0 win. He went on to take the outfield record of 85 caps scoring 7 goals. Wales never played in the finals of a major tournament in that time.

It was that poor record (just the one famous World Cup appearance in 1958) Speed set about addressing when he was made manager in December last year. After a rocky start with defeats to Ireland and England, he slowly began to turn things round with four wins in the last five outings (narrowly losing again to England at Wembley). With Speed promoting promising young players, expectations were high when the 2014 world cup fixture list was announced last Wednesday. “This is such a well-balanced group that we knew everyone would be looking for an early advantage,” Speed said on the day. “As always, there had to be some give and take, but I am very glad that we did not have to use the June qualifying dates”.

Four days later Speed was inexplicably dead sending the football world into mourning. Even the usually ultra cynical Guardian “Fiver” was shocked. His death was up there with any ‘stop all the clocks’ news they had ever heard, Glendenning and Ronay said. “On Saturday, we watched the Wales manager joshing along with his old mucker Gary McAllister on the Football Focus sofa,” the Fiver said. “24 hours later we were among hundreds of thousands of football fans numbed with total disbelief by the astonishing revelation that he was dead”. Gary Speed was as the Fiver said, a great man gone at a preposterously young age, leaving behind a wife, Louise, and two sons, Tommy and Ed.

November 30, 2011 at 12:32 am Leave a comment

Noble Mendaxity: Assange and Wikileaks win a Walkley

Julian Assange has won the Most Outstanding Contribution to Journalism at this year’s Australian journalism Walkley awards– a win that labels him firmly as a journalist of the first rank. Assange won for Wikileaks which organisers said had a courageous and controversial commitment to the finest traditions of journalism: “justice through transparency.” Walkley judges said Wikileaks applied new technology to “penetrate the inner workings of government to reveal an avalanche of inconvenient truths in a global publishing coup.”

Assange’s victory at a traditional media awards night may be a surprise, as is the fact is he is listed as a journalist at all. He has never worked for a newspaper, broadcaster or major media proprietor. Apart from the occasional contribution as a columnist or blog post, he is not even a curator of editorial content. Prior to Wikileaks, he was most famous as the underground computer hacker “Mendax”. Yet the award is thoroughly deserved and as Glenn Greenwald says Assange’s Wikileaks produced more newsworthy scoops over the last year than every other media outlet combined.
It is “Assange’s Wikileaks” as the man himself never stopped reminding his former co-pilot Daniel Domscheit-Berg. Assange’s biggest fear was that Domscheit-Berg, the other half of a two-man operation, would claim to be “co-founder.” Assange’s towering ego made him insufferably vain and uncaring of others, but his steadfastness to his great idea made it all possible. Wikileaks changed the relationship of whistle blowers to media by deliberately not knowing who was sending them material. The reason disenchanted staff from Julius Bär bank or escapees from Scientology trusted Wikileaks, was that Wikileaks was deliberately set up so they could never track the whistle blower. The guaranteed anonymity set it apart from all classical forms of investigative journalism.

So it was a shock to Wikileaks when Bradley Manning was exposed as the Collateral Murder and Cablegate contributor. Manning was exposed not by Wikileaks but by his injudicious conversations with former hacker Adrian Lamo. Manning has always been provocative so it was inevitable he would eventually fall foul of authorities. That does not excuse his shameful treatment by US authorities or calls by wingbats such as Congressman Mike Rogers (R-MI) for his execution.

It was the depth and scale of the cables Manning donated to Wikileaks that astounds. A quarter of a million US diplomatic cables with a quarter of a billion words. Released from almost every embassy of the world, they are a snapshot of international relations at a deep and powerful level. They show what decision makers are really thinking and occasionally what they really do. The embarrassed Americans have spitefully hit back by making it difficult for the non profit to receive donations.

With such a large hoard of data at their disposal, it was natural Wikileaks would want to share it with trusted media brands. The New York Times, the Guardian and Der Spiegel (the latter with Domscheit-Berg connections) began to publish their own spin on selected cables. The media that missed out were jealous of the chosen few and the few did not want to share with the many. In the end Assange’s relationship with the papers soured.

Assange could never fully trust anyone nor be trusted in return. His full hacker nickname “splendide mendax” means nobly untruthful and Assange felt he could get away with anything due to his “higher calling”. His acceptance speech to the Walkleys (delivered by video) shows he still has plenty of stomach for the fights ahead. “An unprecedented banking blockade has shown us that Visa, Mastercard, the Bank of American and Western Union are mere instruments of Washington foreign policy,” he said. “Censorship has been privatised”.

Assange is paranoid but he has offended many powerful people so he has much to be paranoid about. He has also much to be proud of. Wikileaks may collapse under its own internal contradictions but the idea a whistle blower can anonymously pass their information to a wider public is extremely powerful. Big media could have developed this technology but didn’t. Yet the open slather of Cablegate has ultimately ruined Wikileaks’s ability to pass on more mundane but vital information about banks and private companies. Assange’s former offsider Domscheit-Berg is developing Openleaks in the same mould, but more cautiously.

In his book Inside Wikileaks, Domscheit-Berg says Assange tried to do too much, too soon. “The sources uploaded the documents, members erased the metadata, verified the submissions and provided context,” he said. “At some point it became impossible to do all these jobs adequately.” That has never stopped Assange from trying. He is now immersed in a court case which will eat up considerable energies but I think he will continue to be a freakish force of nature. The Walkley Trustees said Wikileaks was not without flaws. But, they said, by constructing a means to encourage whistleblowers, “Wikileaks and editor-in-chief Julian Assange took a brave, determined and independent stand for freedom of speech and transparency that has empowered people all over the world.” Hail to the editor-in-chief.

November 29, 2011 at 12:12 am 3 comments

British Bread and Circuses

 While the Leveson Inquiry brings us revelation after revelation about the sickness at the heart of British tabloid journalism, the tabloids themselves continue to look elsewhere. The Sun could be expected to ignore its owners problems, its front page was more worried about George Michael’s pneumonia. But none of its competitors saw of it as a major issue either. The Express hails an anti-Euro victory, the Mail was talking about fat women, the Star fixed its eyes on Beckham, and the Mirror was fretting over Gary Glitter.

None of News’s enemies were keen to put the knife in. While the Inquiry examines the techniques at the News of the World, it is also gradually throwing light on a sick industry that sees the need to get the story overwhelm all other priorities. The stark testimony of Millie Dowlers’ parents and the McCanns and all the other victims show an industry that is out of control and beyond self-policing. Hacked Hugh Grant is right: a section of the British press has become toxic using tactics of bullying intimidation and blackmail.

None of the other papers are prepared to the truth of Grant’s charge. But it is instructive to listen to Guardian editor Alan Rusbridger’s Orwell Lecture. When the Guardian first exposed the Gordon Taylor hacking in July 2009, it was Guardian police criticised not the News of the World. News International claimed the Guardian had “deliberately misled the British public”. Glen Mulcaire and Clive Goodman were jailed for illegally intercepting phone messages from Clarence House but they were just rotten apples.

It wasn’t until Nick Davies produced the “for Neville” emails at a House of Commons select committee that the apple defence fell apart. One of the documents seized from Mulcaire’s home had details about the News of the World’s systemic hacking in an email he received with instructions it was for Neville Thurlbeck, the paper’s chief reporter. The document was among 11,000 seized from the house but rotting in a plastic bag until plaintiff Gordon Taylor’s team got hold of them in a court order. Again it was police and newspapers action to deny natural justice.

When Taylor’s legal team advised NotW’s head of legal Tom Crone they had the For Neville email, Crone immediately went to see James Murdoch. Murdoch was appointed CEO of News International in 2007. Murdoch agreed to pay £1m in a secret settlement: £300,000 for their own outside lawyers, £220,000 for Gordon Taylor’s lawyers, and £425,000 to Taylor himself. Crone and News of the World’s former editor, Colin Myler told the House of Commons Select Committee Murdoch was briefed in 2008 about For Neville and the phone hacking before authorising the payout. But Murdoch has denied the allegations twice to the same committee.

The New York Times called his performance unflappable. These were hard times for the News empire, NYT said, with the folding of NotW, the loss of the even bigger $12 billion bid to buy BSB and the exit of many of its top executives. Murdoch had admitted he knew of the existence of the emails but had never seen them or understood their significance. Crone and Myler were wrong, he told the committee.

But the Tory member of the committee Philip Davies said if Murdoch was right, then it was incredible he paid out so much money to fix the Taylor problem without looking at it first. Paul Farrelly, another committee member, said a 10-year-old would have asked how Clive Goodman could have been the only hacker when he was the royal reporter and Gordon Taylor was clearly “not a member of the royal family.” When committee member and hacking victim Tom Watson told him he was the first Mafia boss in history who didn’t know he was running a criminal enterprise, Murdoch responded it was “inappropriate”.

The only reason it was inappropriate was that Murdoch did indeed know of the criminal goings on. Much like today’s tabloids, his preference was to simply ignore it. Many of the crowd who turn up to the hearings are there to see the stars giving evidence and don’t care about press freedom or responsibility. As Murdoch and his fellow publishers know, the nefarious doings of the press doesn’t sell newspapers. And it will never appear on the front page – not while Freddie Starr is eating my camel. Given their abject surrender of the fourth estate, the industry can have no complaints if Justice Leveson takes away some of their privileges.

November 27, 2011 at 12:42 am Leave a comment

Gillard wins Harry’s Game

 An extraordinary last day in parliament has left Julia Gillard’s Government more likely than ever to see out its three year term of office. Never mind the possibility of Labor abandoning its pokies promise to Andrew Wilkie. It won’t, because chances are it will still need his vote on occasions to come. But Labor now has a buffer in case of the possibility of any Labor MP falling under a by-election bus. It offers the Government more certainty to allow it power ahead with its reform agenda for the first half of 2012 before it starts to work on the difficult but increasingly plausible business of getting re-elected.
Photo: Fairfax
It was Speaker Harry Jenkins who set today’s drama in motion as he announced his shock resignation as the first item of business today. The word was out quickly that Labor would move to install deputy Speaker and LNP renegade Peter Slipper into the position, giving the Government a net benefit of two in the parliament.  “Slippery Pete” has a dubious history as a parliamentarian and has been increasingly on the outer in Coalition circles. He was in trouble recently for hosting Kevin Rudd while John Howard was in the electorate.
Many now wonder whether today’s events were canvassed in the meeting, a charge Rudd denies. It seems unlikely Rudd would have accepted such a kingmaker role, given his own royal ambitions. Slipper also faces a strong preselection challenge for his Queensland seat of Fisher from former Howard Minister Mal Brough. Tony Abbott’s warning today that anyone from the party accepting the position of Speaker would be axed, was always a fairly benign threat to Slipper. He saved Abbott the bother by resigning as first act of Speaker. Slipper didn’t take long to dispel doubts he might favour the Coalition by firing four of their MPs out of the chamber during an unsuccessful censure motion.

The man Slipper replaced was the ideal Labor Speaker. Harry Jenkins holds the very safe Northern Melbourne seat of Scullin that only he and his father have held since its creation 42 years ago. He is Labor’s longest standing MP and was second deputy Speaker for the entire Howard era. He was the obvious candidate for Speaker after Rudd’s 2007 win but after Gillard’s knife-edge win last year, the Libs turned down a proposal to pair the Speaker and maintain a two-vote buffer.

The problem of how to claw back that vote has always been at the back of Gillard’s mind. When the moment finally arrived, it led to an hour or so of high farce. Labor nominated Slipper while manager of opposition business Christopher Pyne called it a “day in infamy” and counter-nominated Labor’s Anna Burke. Burke declined as did another eight Labor MPs Pyne spruiked for the job – Dick Adams, Sid Sidebottom, Sharon Bird, Kirsten Livermore, Steve Georganas, John Murphy, Maria Vamvakinou and Yvette D’Ath. Slipper was then elected unopposed. Labor then proposed Burke for the deputy Speaker while Pyne proposed current second deputy speaker (and my local MP) Bruce Scott. Burke squeaked home 72-71. Scott remains second Deputy Speaker.

The opposition’s “infamy” charges won’t wash – they have form in this game. In August 1996, Labor refused the new Howard government request to make Mal Colston deputy president of the Senate. The Liberals nominated him and he resigned from Labor, with former colleagues calling him a “rat and a snook”. Yet Michelle Grattan has a point when she said the vote may tarnish Gillard. Slipper’s issues are well documented and Tony Abbott had a fair point in being sarcastic about the PM’s declaration she only found out about Jenkins’ decision at 7.30am this morning. Given the enormous consequences of the resignation, it seems difficult to believe this wasn’t orchestrated long in advance.

Nevertheless as Grattan also observes, most people couldn’t care less about the Speaker. Bob Carr noted today Gillard’s “coup” sent a message to media and business that they will see out a full term: “we are here, get used to us.” Carr said success fed success and Gillard’s recent wins will reverberate in the community and give her a growing reputation of a tough operator and survivor. “In the New Year the nagging, neuralgic issue of poker machines will be subjected to a compromise and the anxiety of backbench Labor members, especially in NSW, will dissipate,” he said. Carr may be over-optimistic but it is also plausible. Not for the first time since the 2010 election, Gillard has blindsided Abbott. Today’s events will give the Government marginally more certainty in the difficult business of governing the country in 2012 and that is no bad thing.

November 24, 2011 at 11:23 pm Leave a comment

Gillard renews Australia’s commitment to Afghanistan

Prime Minister Julia Gillard gave Australia’s annual justification (hansard transcript) for the Afghanistan to parliament yesterday. Since the last speech of this kind, 11 Australian soldiers have been killed bringing the 10 year death toll to 32. Almost 3,000 coalition troops have died in that time as well as countless Afghans. Gillard admitted straight away it was a long and difficult war that in tandem with Iraq has cost the Australian taxpayer $4 billion (it costs Americans that every two weeks). But she also called it a “just cause” – with a time limit. By the end of 2014 international forces will withdraw handing over security to local forces. By then Gillard expects Australia’a aim for Afghanisation will be realised: “a functioning state able to assume responsibility for preventing the country from being a safe haven for terrorists.”

Gillard said Australia’s mission was clear – protecting Afghans, training security forces and building the capacity of the Afghan Government. She said they were making progress and the sight of “ramp ceremonies overseas and funerals at home” were only part of the story. Australia has 1,550 troops on the ground, two thirds in Oruzgan Province. Troops rotate every nine months with many on second and third deployments. Aussies patrol Oruzgan with US troops with contingents also from Slovakia and Singapore.

They are training the Afghan 4th Brigade with whom they work together removing explosive devices and searching for components. They maintain patrols up to 75km from Tarin Kowt and join operations in other provinces to cut out “rat runs” to Oruzgan. Meanwhile Special Forces target leaders, bombmakers and the heroin trade. In the last year the Afghans have been taking the lead while Australians concentrate on mentoring and support. Gillard said Australia was one of the top 10 aid bilateral donators to Afghanistan spending $125m in 2010-11. Programs include primary schooling, agricultural training, small business loans and mines removal. Australian Police are offering training too as are civilian administration. In Oruzgan they are setting up basic infrastructure in health, education and rural development.

Gillard said 2011 was a good year which brought the death of Osama but it also showed the complexity of the war. She said 35,000 Pakistanis, mostly civilians, had died in the war but Pakistan needed to do more to combat extremists. The Taliban remains undefeated though the Afghan National Army is improving. She said Afghanistan’s wealth went backwards from 1960 to 2002 but is climbing again. Education is up from 1 million to 7 million students including 2.5m girls. Access to basic health reach has climbed from 10 percent to 85 percent of the population. The economy has grown 11 percent each year since 2002, she said (though that statistic is debatable.)

Gillard admitted the rogue army attacks on Australians (and others) had “grave significance”. She said the attacks killed Afghans and Aussies alike and the overall force was now 300,000. She said the attacks did not represent a pattern and the 4th brigade was on track to take the lead role in Oruzgan security in 2014, or possibly earlier depending on progress. The US will reduce its number 10 percent in 2012 by a third to 68,000 but the shape of the US commitment beyond 2014 was not known. The presidential election that year will also be a big test.

Gillard said the new Australian embassy in Kabul was a “bricks and mortar” symbol of investment in the region (though information on the embassy remains scanty). She said vigilance was still needed against al Qaeda and the groups it has inspired though she could not confirm if Australia would play a longer term counter-terrorism role. She did say a continued Special Forces presence beyond 2014 was “under consideration”.

Gillard thanked the ADF for the burden they had been put under since 1999. As well as the dead, over 200 Australians have been wounded including 18 this year. She said the best tribute to those who died was to “live by their example”. Gillard said Australia would defend its national interests. “We will deny terrorism a safe haven in Afghanistan. We will stand by our ally, the United States. We will complete our mission of training and transition in Afghanistan,” she concluded.

November 22, 2011 at 8:18 pm Leave a comment

To CSG or not to CSG, that is the question for NSW

 New South Wales is finally grappling with issues in its burgeoning coal seam gas industry that Queensland has had to deal with for several years. As early as 2008 Lucas Energy described NSW as “full of opportunity” for CSG companies. But the State was slow to catch on. Currently, gas makes up 10% of the NSW energy mix and more than 90% of that gas is imported from other states. But that is rapidly changing as companies attempt to exploit its rich resources to feed the Asian and local gas market. The State Government has approved exploration wells and extraction projects in Gunnedah, the Hunter Valley and Sydney’s southwest and applications are in place for the Illawarra and Gloucester. But as the industry flexes its muscles, it is beginning to run into some stern resistance.

The Greens’ Jeremy Buckingham has introduced a private member’s bill in the NSW Upper House which proposes a 12 month moratorium on “the granting of exploration licences for, and the production of, coal seam gas; and for other purposes”. It also wants an end to mining in the Sydney area.

NSW Labor has done a 180 degree turn in opposition and now supports Buckingham’s moratorium. Labor leader John Robertson announced a new policy this week of supporting a moratorium on coal seam gas licences, the issuing of extraction licenses and applications to expand existing operations. Robertson said the Government should not be allowing CSG extraction to proceed until a water-tight regulatory framework is in place based on “independent scientific research and conclusive evidence”.

Their party comrades north of the Tweed are still in Government but face opinion polls of 39-61 and are likely to lose next year’s election. With three major projects approved, the incoming Queensland LNP are unlikely to change their mind and support the ongoing moratorium calls from farm and environmental groups. And a NSW moratorium won’t succeed without the support of the NSW Liberal Government. The voters may be uneasy about CSG, but the new NSW Government is looking enviously at Queensland’s royalties.

When NSW Premier Barry O’Farrell was elected in March, he immediately announced a 60-day moratorium on CSG exploration licences citing concerns about the contamination of prime agricultural land. When that expired, NSW Resources and Energy Minister Chris Hartcher imposed further regulations on the industry including banning the BTEX chemicals banned by Queensland, a continued moratorium until the end of the year on fracking, the need for water licences, a ban on evaporation ponds and new public consultation guidelines. Hartcher continues to tiptoe around the issue. He said it was important the inquiry heard all views, including that of industry. “Everybody’s interests need to be looked at and considered including those of landholders, the industry and the government,” he said.

But the Libs have constituted an Upper House Inquiry conducting statewide public hearings on on August 5. It was tasked to “inquire into and report on the environmental, health, economic and social impacts of coal seam gas activities” and also examines CSG’s role in “meeting the future energy needs of NSW”. Its report is due on April 6, 2012.

Local government officials are telling the Inquiry they are unhappy with the industry. Lismore City Mayor Jennifer Dowell told the Inquiry her council was opposed to CSG developments. Dowell cited issues such as produced water, evaporation ponds, irrigation groundwater contamination, methane leakage, loss of prime agricultural land, landholder agreements and social impacts. At the same hearing Ballina Mayor and presidential of the regional group, Phillip Silver agreed with Lismore but recognised an inconsistency in that resolution; “Similar to climate change, fluoridation and other scientific matters there probably never will be a unanimous scientific view,” Silver said.

It is the proposed exploration well in the inner Sydney suburb of St Peters that is been particularly controversial because it is close to residential properties and the well would penetrate an aquifer. Dart Energy hold a Petroleum Exploration Licence for the Sydney Basin covering 2385 km2 of the Sydney Basin from Gosford on the Central Coast to Coalcliff south of Sydney. Sydney Lord Mayor Clover Moore says they want a halt to the issuing of exploration licences. Sydney’s submission argues that aquifers and groundwater systems could be significantly impacted. “Gas can help us transition to a greener future, but that can’t happen unless the environmental safeguards are in place,” Moore said.”Gas is not greener if we destroy our farmlands to get there.”

Major industry player Santos fronted the Inquiry on Thursday. They have been producing CSG in Queensland since 1995. Not surprisingly their submission is in favour of coal seam gas mining. They said the practice was safe and environmentally sustainable. Of importance is the fact Santos have bought NSW leading player Eastern Gas for just under $1 billion which builds on Santos’ existing interests in the Gunnedah Basin. Eastern Star Gas Limited’s Narrabri Power Project supplies gas from the 11.3 PJ Proved and Probable gas reserves at the Coonarah Gas Field, (12 km west of Narrabri), to the Wilga Park Power Station, under a 10 year agreement with Country Energy.

The word is that Santos needs NSW gas to meet their first train commitments in 2014-2015. Santos vice president for eastern Australia James Baulderstone told the hearing on Thursday Santos’s acquisition of Eastern Star made it the principal CSG exploration and ultimately production business in NSW. Baulderstone said Santos have withdrawn the controversial 270km Mullaley pipeline from Narrabri to the Wellington power station.

However he argued strongly against issuing a moratorium on CSG exploration until more scientific data is available, as CSG opponents have requested. “Let’s be frank, many of those that oppose our industry know that stopping exploration now will stop the long-term development of the industry in NSW,” Baulderstone said. “Ongoing exploration activity provides the additional scientific data and knowledge of the geology and water resource that everyone agrees is needed.” Barry O’Farrell will have to decide come April, if as is likely, the Government doesn’t support the private member’s bill.

November 20, 2011 at 12:36 am Leave a comment

Too Much Luck: Paul Cleary skewers Australia’s mining boom

Eight years into a seemingly never ending resource boom, Australia is now plundering a million tones of minerals every year from the ground. New industries such as LNG have signed contracts to quadruple exports in the next 10 years and will soon rival coal and iron ore in export earnings. It is a vast and vital natural resource that governments appear to be willing to fritter away frivolously at disgracefully low tax rates. That is the central thesis of Paul Cleary’s new book “Too Much Luck: The Mining Boom and Australia’s Future”. Cleary was at QUT in Brisbane last Wednesday to speak about the problems his book addresses.
Paul Cleary is a senior writer with The Australian newspaper and a researcher in Indigenous development at the Australian National University. In a career spanning 20 years he has reported on politics and economics in the Canberra press gallery and worked as a correspondent in Southeast Asia and as a political adviser. He was awarded a Chevening fellowship by the UK Foreign Office to study at the University of London’s School of Oriental and African Studies and became an adviser to government of newly-independent East Timor in the early 2000s.

Cleary says Australia could learn from East Timor in how to deal with mining companies who have undue influence on public policy. Australia needs to make changes in savings, taxation and regulation if it is to make the most of the boom. East Timor has an oil resource fund as has Norway with its North Sea Oil Fund and Chile with its Pension Reserve Fund based on copper profits. This fund is critical for infrastructure, schools and health needs when the boom finally ends and Australia will have considerably less by way of natural resources to pay for them.

That will require a change of thinking and a way of “pollie proofing” the profits, as Cleary puts it. In the last 3 years leading up to the GFC, the Howard Government blew $334 billion in additional revenues on needless tax cuts and middle class welfare. The result was a spending binge that forced interest rates up by 3 percent. The new Labor Government was forced to borrow $106b to stave off recession. Similarly the Queensland Government was forced to borrow big to pay for the flood and cyclone recovery this year. By contrast Chile used its foreign currency wealth funds to avoid recession and rebuild after a massive earthquake “without racking up a single peso of debt.”

Australia is heading towards the bottom of the quarry with no plans for what to do when it empties, Cleary said. The high dollar is killing off other export industries and tourism which employs far more people than the mining companies. This eventually leads to Dutch disease and the paradox of the two-speed economy. But those industries don’t have the political power of the resource lobby who work on politicians devoted to the quick fix of mining royalties. The State Governments in particularly are hooked on these royalties which make a mockery of their dual role of industry regulator. Cleary said Australia plans to be world’s second largest exporter of coal seam gas (via LNG) despite only having the world’s 12th largest gas reserves and despite the fact that impacts on salinity and groundwater reserves are not fully known.

Cleary said if the States were less cash strapped, they would not be in such an unseemly rush to approve mining developments. He said reforms were needed to share the profits and remove the disincentive to wait for the production revenues. The “third world” taxation system also needed to be fixed to create a future fund and to ensure that governments only spend the average revenue. As Cleary explained to ABC PM that means, taking the 20 year average of mineral revenue as a spending limit and anything above that gets locked away and gets saved into these funds. As Cleary says, failure to do so is effectively stealing from our grandchildren. “We are enjoying an inflated standard of living based on running down an entirely finite amount of non-renewable resources,” he said.

November 15, 2011 at 9:00 pm Leave a comment

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