Saturday, May 31, 2008

Saturday Morning Musings - blogging, Opes Prime and a flight of swallows

Welcome to visitor 31,000 who came from Toowoomba in Queensland.

In an email to me, KVD wrote in part:

And I also wish to make the point that I have now come to think that blogs are a very good means of skimming current issues, but somehow seem to lack the ability or inclination to pursue any issue to conclusion.

Bloggers seem to flit onto the next crisis or issue du jour. And, again, no criticism -just continuing angst....

Finally, a question:  is it better to assist in the resolution of one problem (however small the problem or the contribution), or to comment upon many problems, proffer solutions, but then simply move on?

Now I thought that these were fair comments. I responded:

You point about blogs as a skim is well taken, your point about not pursuing to a conclusion is even stronger. My feeling is that we bloggers, me included, go round like a flock of  swallows circulating round the latest food source, the current issue.

I try to maintain a consistency over time on issues, but the blogging environment is essentially an immediate ephemeral one. This is still important because the swallow's peck does affect things. However, it does not affect a single issue unless that issue is sufficiently sustained over time or has a very particular profile to accumulate pecks.

I will come to the immediate cause of KVD's angst in a moment. First, a brief follow up comment on the strengths and weaknesses of the blogging environment.

I find blogs invaluable in keeping me in touch with the world around me. Like most time short bloggers, I tend not to read posts in detail unless there is something there that demands my immediate attention. Skim and move on.

This blog displays the same reader pattern. Thirty three of the last forty visitors came for 0.00 seconds, just long enough to scan and move on. The remaining seven stayed for periods from twelve seconds to seven minutes twelve seconds.

As I scan, I find issues repeating and also spreading to a degree between blogs, hence my analogy of  a flight of swallows.

Most blogs, this one included, follow particular lines reflecting the interests and biases of their writer or writers. This affects the way we read.

I tend not to read Larvatus Prodeo, for example, because it is too much like the faithful talking to the faithful in a church to which I do not belong.  Instead, I rely on others to attract my interest to LP posts that I should read. I know that the same type of thing applies to this blog.

The overall impact of blogs and blogging is difficult to measure. My feeling is that it's far greater than people realise and has been growing. However, it is the distributative (spread from one to the other) and aggregate effects that are important.

None of this is much comfort to KVD who is especially concerned with the issues raised by the Opes Prime case.

KVD is not an investor, nor does he have particular sympathy for the wealthy and high profile investors caught in the collapse. His focus is on the failure of regulation and compliance, the way in which the case appears to indicate that c0mpliance is mandatory who cannot afford to get around it.

The broad facts of the case were set out by Legal Eagle  in Opes investors fail at first hurdle.

In simple terms, and as I understand it, investors "loaned" their shares to Opes Prime, using them as security for margin loans from Opes to fund share purchases. Opes then used the shares as security to borrow from the ANZ Bank and Merrill Lynch to fund the  loans  to its clients. Investors who exited the arrangement with Opes were provided with equivalent shares.

Opes ran into financial difficulties. The ANZ Bank and Merrill Lynch seized and then sold the shares held as security, forcing down values and creating market confusion.

I am not a lawyer, nor do I know the full facts of this case. Instead, I want to pose a few simple questions based on first principles.

To begin with, what does the case tell us about disclosure rules?

In aggregate, these were large blocks of shares, large enough for their sale to affect markets for individual stocks, large enough to trigger compulsory notification procedures

Accepting for a moment that investors did not own their shares, then who did? If Opes Prime did, and this seems to be the effect of the legal agreement signed by its clients, then it had a disclosure requirement. 

However, there is a linked question. What level of interest in shares is required to trigger disclosure?  The agreement between Opes Prime, ANZ and Merrill Lynch appears to have given them final control of the shares. At what point were they required to disclose this?

Regardless of questions of law, the Opes Prime case raises some important questions about the operation of the disclosure arrangements.

Turn, now, to the agreement between Opes Prime and its clients.

One of the points that KVD made was that, in law, a transferred title is only as good as the initial ownership. As a simple example, if you buy a car that is stolen , ownership remains with the original owner even if you have acted in good faith.

The agreement between Opes Prime and its clients is quite remarkable in that Opes retains ownership of the shares so long as you owe even one dollar.

Take the reported case of  David Regenspurger. Having sold his house, he invested $320,000 in blue chip stocks. He also took out a loan of $100,00 from an Opes Prime affiliate. The effect was to transfer ownership of his entire portfolio to Opes Prime. His blue chip shares were seized and sold.

As best I can work out, he is now an unsecured creditor of Optus Prime for the difference between his loan and the overall value of his portfolio. I have no idea, however, just how that differential might be calculated when shares in aggregate have been seized and put on the market in a forced sale. 

I suspect that the very speed of action may have created something of a legal quagmire in areas like valuation. 

Mr Regenspurger's case is interesting in another way in that he is clearly not, or would appear not to be,  a sophisticated investor. If he could establish this, then he might be able to claim ownership of his shares. In this event, action would be opened up against either Merrill Lynch or ANZ or both.

Now here there is another issue that I do not understand, the difference between ML and ANZ. Both seized shares, only one has so far been sued.   

I think that we can simplify all this as follows.

First, the nature of the agreement between Opes Prime and its clients. Was it fair?

Secondly, the management of Opes Prime, including lack of control and the favouritism awarded certain certain clients as compared to others.

Thirdly, the relationship between Opes Prime and its lenders.

Fourthly, the responses of Opes Prime lenders to the company's problem. including the way they reacted to protect their own interests to the disregard of everything else. 

In considering all this, KVD suggests that Opes Prime shows (among other things) failure of compliance at the big end of town. His view is, if I understand it correctly, that when it comes to failures like this compliance breaches often get classified as simply technical or even ignored because it is simply too difficult to unscramble the egg.

From observation, I think that he is right. This then leaves our system with just two responses. Pursue hard those elements that you can where the broader costs are not too high. Then add to regulation to patch up obvious holes.

The alternative response is to enforce compliance regardless of the costs. None one will in fact do this because our overall system would simply come to a halt. So we come back again to selective compliance across the whole sphere of law and regulation.

In my arguments about compliance I have complained not just about compliance costs, but also about the selectivity it creates. This acts to discredit not just the specific compliance area, but more broadly the law itself.

In Australia today, the judgement that we all make on a day to day basis is which areas of law or regulation to ignore. I stand to be corrected, but I doubt that there is a single Australian that has not broken a law or regulation in the last ten years. 

Friday, May 30, 2008

Slow down Mr Rudd, for all our sakes, slow down

Preamble: I deliberately wrote this post in a school masterly lecturing mode because this fitted with my concept of Mr Rudd as the Head. I have now done a little editing to try to improve balance and clarity at one point.

Thinking about the post overnight, my first key point is that Mr Rudd needs to temper his style if he is to achieve the things he wants. My second, one that I have made before, is that his desire to achieve is outrunning the capacity of supporting systems to deliver.

The Post

When I wrote some earlier critiques of Mr Rudd's style I had not expected them to become an issue so quickly, nor did I expect the cracks in his Government to show so quickly. That's a pity.

Mr Rudd, at this stage in your Government's history I give you a fail. If I was writing the summary on your half-yearly report,I would say: Tries too hard, responds too quickly, unable to set priorities, displays insensitivity to other's needs.

Mr Rudd, you cannot micro-manage an entire country. As Prime Minister you must stand back to some degree from the detail to look at the broader picture. If you wish to be your own chief clerk with all others in supportive administrative roles, that's fine. Just don't expect to be the PM for an extended period.

Mr Rudd, any manager will tell you that you can increase output in the short term by imposing high pressure on staff. Sometimes this is necessary. But you can only do it for so long before the wheels start coming off.

Mr Rudd, Australia is like a huge ship. It takes time to change directions. During that time, you just have to be patient.

Mr Rudd, you have inherited a degraded system of public administration (I am talking about the whole system, not just the public service) that simply cannot provide you with the level of support that you need to do all the things that you want to do in the time you desire.

Finally, Mr Rudd, you are also to some degree a creature of the system that you are trying to fix.

Beyond your stated desire to restore the Westminster system, I have not really seen many new ideas as to how we might improve what we do. I am talking process here, not policy. You seem solidly stuck in the increasingly old-fashioned managerialist status-quo of the last twenty years.


Since I wrote this post, the whole issue of Mr Rudd's style has continued to move to front and centre.

Writing today (1 June) on Mr Rudd's style, Kerry-Anne Walsh, the Herald's political reporter, began her story:

Federal Government ministers, staff and unions are pleading with Prime Minister Kevin Rudd to slow down or risk a serious political backlash.

After outlining various war stories from the Head's front-line, she finishes by quoting Joe Hockey who may be an opposition front bencher but is also a long time friend of Mr Rudd.

Mr Hockey suggested Mr Rudd could lose perspective if he didn't balance his work with quality family and friends time.

"When you lose perspective, you are a lesser politician. You lose perspective about what is important in life.

"He's not only the leader of the country, he's a role model. He's setting a very bad example".

This issue of Mr Rudd's style has real legs because it reflects genuine and widespread concerns. I find it interesting that most do not want Mr Rudd to fail, quite the opposite. There is an overwhelming desire to see him make a good fist of the job. How he handles all this will, I suspect, be seen as the defining moment in his Prime Ministership.

Thursday, May 29, 2008

The alcopop tax strikes trouble

I had no idea when I wrote Alcopops and mixed drinks - The Head strikes (1 May 2008, the day that the press reported the Government's increase in taxes on pre-mixed drinks) just how quickly my forecast on outcomes would prove to be correct.

According to an article in the Sydney Morning Herald, a survey by the Distilled Spirits Industry Council of Australia suggested sales of alcopops had dropped by 38 per cent, while sales of 700ml bottles of spirits had increased by 21 per cent. A spokesman suggested that when other forms of alcohol such as beer and wine were taken into account, total consumption of alcohol might actually have increased

The Council is hardly an impartial body. The axes it has to grind would fell Tasmania's forests.

I tried to check details on its web site, but without success. Given this, I did as I so often do, checked elsewhere. According to a local bottle shop, Woolworth's sales of pre-mixed drinks have dropped by 30 per cent. Sales of spirits have gone up, although numbers were not available.

So we can say that the outcome of this measure has been much as expected. Now we can expect the next round, pressure for an increase in overall taxes on alcohol led by the growing proliferation of special interest bodies in the not-for-profit sector and the official advisory bodies, each of which has their own version of our interests at heart.

I see that Health Minister Nicola Roxon's view is: It's great to see the drop in vodka-based spirits, which we know are targeted at young women.

Ms Roxon's view is actually sexist. She appears to believe that young women need more protection than young men, when all the data appears to suggest that it is young men (as it always has been) who drink the most.

Wednesday, May 28, 2008

Mr Rudd's problems - trouble in the school yard

As I write, our new headmaster is struggling to control his new Australian school. The pupils have become unruly.

The school cadet corp is upset at what some see as favoritism for its elite units in school excursions. Rising prices in the school canteen have upset most pupils. There are real problems with the school's moral tone.

Some of the younger pupils have been binge drinking, other pupils have been engaging in immoral behaviour. The Head's attempt to enforce what he sees as proper behaviour has led to unexpected rebellion among some of the more academic and artistic senior pupils who had previously supported his desire to reform the school.

The school's budget position has become difficult. Despite the arrival of wealthy families in the neighbourhood who have increased school fees, many parents are finding it difficult to meet fees and are demanding cuts.

The school's budget committee and its many official and unofficial advisers are struggling to balance the need for fiscal conservatism with the Head's requirement that the school introduce new teaching methods and the desire of parents for cuts to help them meet immediate needs. Many newly appointed advisers have been surprised at just how unreasonable parents can be.

The Head's attempt to introduce new business based budget approaches and to find the money to pay for his new schemes has met unexpected opposition from the school's major organisational and educational divisions. Reluctant to give up part of their budgets to pay for the Head's new plans but unwilling to object outright, they are dragging their heels.

In his own way, the Head has tried to be consultative.

Staff have been instructed to hold more parent-teacher meetings. The School's executive committee has been holding regular meetings with different groups of parents. The Head convened a summit of selected students to try to tap new ideas for the school. He met with his senior administrators as a group to try to inspire them.

A variety of existing as well as many new school bodies have been charged with the responsibility of coming up with new directions, as well as the implementation of the Head's immediate plans. The school is a flurry of activity. Reports and working papers abound.

Unfortunately, these efforts have not been fully appreciated by staff, students or parents. A staff letter to the senior executive committee dealing with pricing matters for a key item in the school canteen was leaked to one of the many student publications. Those publications have suddenly switched from almost total support to annoying criticism.

Within the school council, the previously splintered and disorganised old guard that had dominated the council has suddenly gained new energy.

In all this, the Head has struggled with a delegation problem. Enormously energetic with an eye for and love of detail, he cannot help his desire for personal control, to see that things get done in the proper way. Few can match the Head's work ethic or his knowledge of detail.

Early on, he took direct control over relations with neighbouring schools. Now, with some exceptions such as the Deputy Head, he seems to suck authority to him.

In the face of current troubles, the Head does as he has always done, attempt to work harder. Armed with eighteen sets of briefing papers, he still faces his opponents on the school council with authority.

Yet the emerging problems in the school are worrying. It is not clear that the over-loaded school systems can cope. The risk for the head is that his very strengths may ultimately undo the things that he has been trying to achieve.

Tuesday, May 27, 2008

Marking Time

Gordon Smith has been turning his photographer's eye on Sydney. I really liked this shot. You will find the photo here. Click backwards and forwards to find his other Sydney photos.

This photo was meant to be an entry point for a much longer post. I find that that post is taking a fair bit of thought. So I thought that I would put up the photo anyway.

Monday, May 26, 2008

Monday Postscripts - Henson, driving licenses, Opes Prime and problems with compliance

I often add postscripts to the end of posts to provide updates. Tonight I thought that I should put the recent lot into a single post.

In Bill Henson, art and child pornography I made a brief comment on the controversy currently obsessing Sydney, whether Henson's photos of young children should be classified as child pornography.

Coming home from work I had no choice but to listen to another round. John Watkins, the NSW Deputy Premier, commented that Australians had become more socially conservative over the last twenty years. I am sure that this is true.

I find the current debate confusing. I remember the sexual drives, tensions and conflicts of my teen and early adult years too well to be too censorious on sexual issues. My problem is that the discussion combines so many issues as to be a total mess and also appears to hark back to a Victorian age that I thought was long and rightfully gone.

The only positive that I can see from my viewpoint is that the issue has again awakened my interest in looking at social history to delineate some of the major changes. I suppose that that's a plus.

As I write, NineMSN is running an on-line poll on the question should L-Platers have to do 120 driving hours before obtaining a driver's license.

I took looked at this in Saturday Morning Musings - the burden of compliance. I suggested that, from a practical viewpoint, this was poorly judged and socially discriminatory. That remains my view. However, I note the figures on the NineMSN poll are running at 23,481 in favour of 120 hours, 8,982 against. So I am very clearly in a minority.

In a comment on the burdens of compliance post, Kangaroo Valley David referred, among others, to the Opes Prime case. He said in the context of compliance and rules: So, if not abolished then at the least ignored, and at morally worst, subverted.

David makes a fair point, and Opes Prime does bring out some of the conflicts.

The failure of the ANZ Bank to declare a substantial interest in certain companies appears to have been treated as a technical breach. However, to my mind, this misses the point.

The purpose of the disclosure rules is to ensure an informed market. Had ANZ in fact declared a substantial interest, then clients of Opes Prime might have realised that the shares that they thought were theirs in fact belonged to the ANZ. I am not a lawyer. However, I would have thought that non-disclosure in these instances was more than a mere technical breach.

I am not opposed to regulation per se. However, creation of a legal and regulatory environment that breeds selective disregard of, or at least movement around, the law creates problems.

At the big end of town, there are legions of high paid specialists to help companies and wealthy individuals. Every so often the really greedy or sometimes just the unlucky are lopped off.

At the opposite end of the spectrum are the parents and kids who will work round what are in fact unworkable driving regulations by falsifying log books. Again, at least some of the gross cases will get caught.

Just as the Opes Prime case has led to moves to tighten corporate regulation, so the NSW Government will be forced to work out new ways of combating these breaches of the law. I am not quite sure how they might do this. Perhaps create a new compliance division within the NSW Roads and Traffic Authority?

And so the process continues.

Sunday, May 25, 2008

Bill Henson, art and child pornography

Having finally completed a long post, Sunday Essay - The beliefs of a New England populist, I had absolutely no intention of writing another post. Then, as I often do, I checked Neil's blogs. He had another post on the Henson matter, the controversy that has broken out over a Sydney art gallery display of child photos.

Neil's posts on this issue will give you a feel. They are:

Now I don't want to comment on the imbroglio. I just don't feel strong enough. Instead I just want to make a short, very personal, comment.

Since we came down to Sydney in early 1996 I have been the primary child care person. Cooking, school, all that lot, while still working if mainly from home.

I was jotting down some notes because I thought that the experience might make an interesting, even useful, series. One thing I was going to refer to was the impact of our current obsession with child sexual abuse.

Putting this quite simply and bluntly, it really adds to the difficulty of any male taking on the primary child care role, especially where girls are involved. You have to guard what you say and do all the time to ensure that the most innocent actions are not misinterpreted.

Kids, especially primary kids, need affection and like cuddles. That's a no no. But how do you stop a nine year old friend of your kids who has known you for half her life from giving you a hug? Even swinging kids around in the play ground can, as it did in my case, lead to someone calling you a pervert.

Or what about cases where your kids want a friend to come home and the mother rings up to check that your wife will be there? And the kid cannot come because your wife will be at work.

It all makes things very hard.

Sunday Essay - The beliefs of a New England populist

Those who read this blog on a regular basis will know that I score left of centre on the conventional political tests. Yet they will also know that I feel the need to deny that I am a conservative because some of the things that I write lead to me being typed as conservative under our conventional labelling systems . They may also notice how often I use the phrase outsider-insider or its converse indicating that I know how systems work, but am not part of them.

Like all people, my core beliefs are mixed and come from my family background transmuted through my own life experiences. I have described some of these varying influences, including the way they seem to have carried down through several generations spread across countries.

Helen, my eldest, started with management studies, a very popular topic in today's world. She switched to Economics-Arts because she found management studies too narrow. Last week, dissatisfied with the narrow applied mathematical focus especially in microeconomics, she chose economic history as her third major, adding to development studies and management.

She rang me quite excited to make me guess, unsuccessfully as it turned out, what she had chosen. She knew that I would be interested and pleased and I was. However, she did not realise that she was the third generation on the Belshaw side - the three generations that have been to university - to chose a mix that involved in some way economics, history, development and anthropology.

In describing my beliefs I use the term New England populist as a label to describe the core political tradition to which I belong. This tradition sits somewhat outside the conventional political constructs of left and right, labour and capital, conservative and labor, in part explaining why friends and colleagues sometimes have difficulty in understanding where I fit in the political spectrum. The answer is I don't fit.

What is New England Populism?

The term New England populism is my own label. Given this, what do I mean?

New England populism refers to a set of political beliefs and attitudes that took form in Northern New South Wales. While the genesis of those beliefs dates back to the colonial period, they were first articulated in a structured way the period after the First World War and especially during the first part of the 1920s.

To my knowledge, New England populism is the only sustained separate regionally based political belief system and, arguably, the only Australian political belief system with a claim to being uniquely Australian. In saying this, I am not saying that all the elements are unique. They are not. However, what is unusual is that the form and combination those beliefs took was based on very particular geographic and political circumstances including the fight for self-government.

My use of the term New England is itself a political statement.

New England was originally called Northern New South Wales, the Northern Districts, the Northern Provinces or simply the North. Those living in New England called themselves Northerners.

At its Maitland Convention in 1931, the Northern Separation Movement adopted the name New England, the name of the Tablelands forming the geographic centre of the North, as the title for the whole area. From then until the defeat of the New State plebiscite in 1967, the use of the name New England spread and became fairly universal. While New England is still used in the way I use the term, the terms Northern NSW, the North or even Northern Provinces or Districts have come back into vogue since 1967.

The NSW Progressive or Country Party is the best known political manifestation of New England populism. However, there are problems here at a number of levels.

The various State Country Parties that emerged after the First World War and the Federal Party itself all drew from various agrarian movements. In broad terms, these movements were dominated by small farmers and had a strong radical populist element. The early Victorian Country Party had more in common with Labor than it did with the Melbourne establishment dominated Nationalist Party as the then Liberal Party equivalent was known.

In NSW, the Progressive Party as the Country Party was first known attracted broader support. However, this was patchy. Only in New England did the Party become the dominant political force outside the still Labor dominated Newcastle and Lower Hunter, combining farmers and graziers, town and rural people.

The Party, especially the earlier Party, was still populist. However, this broader constituency together with the need to maintain support from the Graziers' Association, a major funder, also made it more conservative. This conservatism has tended to increase with time.

In his study of the NSW County Party, Don Aitkin pointed to the importance of country mindedness in the development of the Party, the idea of the virtues of country life combined with the sense of an oppressive city, an oppressed country. This survives today, although the term regional has now often replaced country. My use of "metro" as a sometimes pejorative term is an example.

Don also pointed to the importance of separatist agitation in solidifying broad support behind the Party. However, in doing so I think that he failed to recognise the importance of the separatist movement as an ideological and political force in its own right.

During the nineteenth century there were various moves to gain self government for Northern New South Wales, but these remained sporadic. However, agitation resumed towards the end of the First World War and then continued in a largely sustained way for the next fifty years.

This added a further and distinct thread to the New England populist tradition, for the separatists were attacking the legitimacy of existing constitutional structures. In doing so, they had to address issues relating to rights of self-determination, the proper basis for Government and allocation of powers within a Federal system. As part of this process, they forced a number of Royal Commissions and Parliamentary inquiries into constitutional issues.

The relationships between the separatists or new staters on one side, New England's political parties on the other, was a complicated one that is still affecting the New England political landscape today.

Early Progressive or Country Party politicians could easily embrace the cause. They were themselves starting a new political movement and for similar reasons. They saw separation as part of the same process. Led by Earle Page, all the Northern Progressive and Country Party parliamentarians became involved in the separation movement.

Nationalist politicians whose main power base was in Sydney and were under political threat from the emerging Progressive/Country Party were quick to attack the new separatist movement. The need for coalition forced some modification of the Party position. However, the Nationalist/United Australia/Liberal Party hierarchy remained deeply suspicious, in part because of a fear that New England's separation would leave them in a permanent minority position in a truncated NSW.

The Labor position was more complicated.

From 1920, the New England leaders took their cause national, attempting to create separation movements throughout Australia, thus reshaping the Australian political structure. In doing so, they deliberately reached out to the ALP.

While the majority of the New England leaders were now new Country (Federal) or Progressive (State) Party parliamentarians, this was not as bigger obstacle as it might seem today. Political alliances had yet to solidify.

A bigger obstacle lay in the earlier decision by the ALP to adopt unification as a platform item. Despite this, the new state cause did gain some ALP support, including Queenslander Frank Forde who later became Labor Prime Minister for a brief period.

NSW was a different story. The Progressives threatened Labor's country seats. NSW Labor opposition was strengthened a little later by the decision of the Progressives to establish the first coalition agreement with the Nationalist Party, then strengthened again during the political turmoil of the depression.

As the depression worsened and suspicions of the Lang Labor Government deepened, separatist agitation sprang up across regional NSW. These various movement finally merged with the Country Party to create the United Country Movement. The UCM swept country NSW at the next election.

New states were a central UCM plank, and indeed the new Government did appoint the Nicholas Royal Commission to draw up boundaries for areas suitable for statehood within NSW. However, new state support had dropped and, when offered a referendum, the New England political leadership within the NSW Government were reluctant to put the matter to the test.

The New State Movement emerged again at the Second World War, beginning a sustained campaign culminating in the 1967 plebiscite.

Movement activists had learned a bitter lesson from the United County Movement experience. The new movement was firmly non-party political, although Party responses in fact remained the same. NSW Labor, concerned that the Party might find itself in a permanent opposition position in a New England state, campaigned strongly for the no case. The very high no vote recorded in Newcastle and surrounds was sufficient to offset the yes vote elsewhere in New England, although the margin (4 per cent) was not high.

Relations between the Movement and Country Party broke down in the aftermath of the plebiscite. Angry, the Movement redrew the boundaries to exclude the Hunter Valley and then ran New State candidates at the next election. This created a bitter divide within the Movement and Party.

Exhausted, the Movement collapsed. The damage done to the Party was longer term in its effects.

The Party's strength in New England as compared to the rest of NSW had always rested on its capacity to mobilise support across very different groups. Although not clear at the time, this was in fact heavily dependent on the existence of the New State Movement because this provided a separate and unifying political focus that the Country Party of all the parties could best capture.

Today New England is still the National Party's strongest base in NSW. Yet that base has been much eroded by demographic change one side, the rise of the New England independents on the other.

To my mind, it is no coincidence that it should be New England where the independent movement is strongest, best organised and most cashed up. While they may not see it in this way, the New England independents best capture the New England populist tradition. Meantime, the NSW Nationals remain locked into the now conventional political structures in which their only distinguishing feature appears to be a regional focus on the "conservative" side of politics.

What do New England Populists Believe?

I have written at some length on the historical background because you will not find this material in any Australian history book. The New England story has been essentially expunged, reduced to passing references or a few footnotes.

It should also be clear that many different streams contributed to the development of New England populism. As you might expect, this led to different and even conflicting views. Further, those involved were not trying to develop a new political ideology, but were focused on more immediate political and practical concerns. There is in fact a reasonably substantial volume of political writing, but this was written for a purpose.

Given all this, what are the core beliefs of a New England populist?

A New England populist rejects the intellectual, institutional and political constructs of left and right. In old terms, the New England populist does not accept that there is capital on one side, labour on the other. In the middle lie the vast bulk of people, just trying to make their way in the world.

A New England populist believes that those who have power will tend to misuse it. This holds for big banks, Government, unions or institutionalised political parties.

When the Progressive Party first began its slogan was no preselection or pledge. This was designed to break the power of the machine. As part of this, any Party member in good standing should be able to run for election in the Party name. This may have been impractical even in a preferential system, but multiple endorsements were a common Country Party practice for many years.

A New England populist believes that the majority will always tend to oppress the minority in the belief that their views are self-evidently right. Safeguards are therefore required.

This leads to the constitutional stream centered on devolution of power and the geographic basis of Government. In constitutional terms, a New England populist believes that Governments must be representative and close to the people. To this end, entities whether states or local councils should be based on commonality of interest.

As part of this, a New England populist believes that people should be able to leave an entity, create or join another, if the first entity ceases to meet their needs.

A New England populist does not believe that Commonwealth-state powers should be fixed for ever. Powers should change as needs changed. However, constitutional entities must have real powers. Devolved powers do not work because, as with local government, the entity devolving the powers will always over-ride if its interest require it.

While suspicious of Government, a New England populist believes that Government has a key role to play in redressing social ills and in protecting the individual. Individuals must be responsible for their own actions. Government must act where events beyond individual control affect people.

Governments should also act to ensure that all people have equal access to services such as health or education.

A New England populist believes in collaboration, cooperation and collective action. People must organise in their own defence and to achieve joint objectives.

A traditional New England populist would regard the atomistic, individualist position of some so-called neo-conservatives as absurd. Improvement starts from individual and collective action. Governments then, or should, swing in.

This point is worth further development.

A New England populist believes that we have collective responsibilities. When things go wrong, the starting response is individual action. At the simplest level, this is knowing and worrying about your neighbour. If someone is sick, bring food.

Then, if things go belong this, you work through collective action. Fund raising, new programs, all supported by individual action. Beyond this is action through Government.

This is no mere rhetoric. It describes many of the positive developments within New England.

A New England populist respects authority and constitutional forms, especially parliamentary democracy.

Noticeably, New England populism is silent on personal moral issues beyond concepts such as personal or collective responsibility or duties. While I have read comments on personal moral issues from individuals or indeed from parties or organisations, there is no clear common thread that I can attribute to New England populism as such.

I make this point because it is noticeable. One could argue that this reflected a distinction between the personal and public domains. However, while I think that this is probably true, I am not sure what it really means.

In finishing, I remain as I was, an un-reconstructed New England populist.

Saturday, May 24, 2008

Saturday Morning Musings - the burden of compliance

Many Australians point to what they see as current problems.

I am not talking about things such as food or petrol prices, although these are real worries for many. Rather, many point to a pervading sense of unease, of oppression. Those same Australians press for Government action in general and to resolve specific problems. Unfortunately, they fail to realise that the second, the desire for action, is a major cause of the first, the sense of unease and feeling of oppression.

This post is not an argument for freedom or libertarianism. Rather I am writing as an economist. Here I want to show why I am concerned that the current system may bring Australia down, why I cannot share a positive view of our economic or social future in the absence of fundamental change.

Let me start with a simple example to set the scene.

In NSW, the Government changed the law increasing the log book hours required to get a driver's license from 50 to 120. It sounds so reasonable, teen-age driving deaths are a problem, increase the time required to get a license. However, now the practical problems are starting to bite.

120 hours is a lot of time. Over two hours a week if spread across the full year. Over four hours a week if spread over six months. Over eight hours a week if kids want to do it in three months.

Each learner driver must be accompanied by a licensed driver. That driver must spend the same time as a kid. Parents struggle to find this time, especially if they have two learners at the same time. Many households have only one car, so the family car is tied up for a lot of time.

One solution open to the wealthy is to pay for lessons. I tried to check lesson prices on-line, but most don't give it. However, assuming an hourly rate of $50, 120 hours equates to $6,000. That's a lot of money.

If we put the same value on parent time, the extra 70 hours equates to an average cost of $3,500 per driver. I haven't checked the number of kids in the 16 year old age cohort in NSW. On the basis that there is 100,000, the extra annual cost equates to $350 million.

The real numbers don't matter. A conservative back-of envelope calculation is enough to make the point that this is a high price.

Leave aside the equity and social issues, the fact that many lower income families cannot afford the price, I have done enough to establish that the change adds a high cost.

Two questions arise.

First, is it worth it in terms of lives saved? Leave aside the number of parents and kids who now have an incentive to break the law, if 100 kids are saved this equates to $3.5 million per life. That's a fair bit of money.

Second, can the same result be achieved in a different way? I think that the answer is yes. Focus on outputs, not inputs. Make the driving test tougher.

In considering both questions, remember that the provisional license requirements have been toughened in order to deal with just the same problem that has led to the extra seventy hours.

This is a small example that is replicated across the whole economy and every aspect of human life.

Some years ago I was friendly with a chap called Philip Miskin. Philip, the founder of the commercial bill market in Australia, had a fascinating life. But that's another story.

This night we were sitting in the Bill Acceptance Corporation offices in Sydney drinking scotch. Philip remarked that what he had done with the bill market was no longer possible. When I asked why, he explained that the growth in compliance costs meant that smaller firms could no longer afford the costs associated with the development of a new financial instrument.

This remark stuck in my mind.

Some time later, we were looking at Australian productivity and economic growth. My team attempted to break activities into two, those connected with administration and compliance, those devoted to investment and expansion.

We found that the importance of the first group was rising relative to the second. As it did, the relative dollars available for the new declined.

Later I added a further factor, the decline in the real efficiency of the modern organisation. This is too big a topic to deal with in this post, so just take it as an assertion for the moment.

There has been much discussion on the increased Australian productivity that has underpinned a significant part of our growth. When I drop below the aggregate numbers and look at the causes of that growth, I find a series of one-offs.

To my mind, we have picked off the low hanging fruit. I simply cannot see where future gains might come from in an environment where administrative and compliance costs will continue to chew up an increasing proportion of resources.

Australians may not understand the detail, but they can feel the pattern. We can see this in the business community's call for less regulation, in the Rudd Government's stated desire to reduce regulation as the next stage in micro-economic reform. Yet if you look at the detail of Government actions around Australia over the last six months, the focus on regulation and control continues.

One of the most interesting if disturbing responses to the pattern is the increasing tendency of people to opt out, to focus on the personal space. People talk about simplifying their lives, about downsizing. There is a growing focus on life-style, on the areas where people feel that they still have some control.

Our system is not going to collapse, at least not in the short term. What appears to me to be more likely is continued growth in system complexity and cost to the point that we will no longer be able to afford it. At that stage, things will start breaking apart.

We can, I think, already see an example of this in the current inquiry into the child welfare system in NSW. Here the combination of unrealistic expectations, organisational rigidity and the burdens of compliance and control have created what is essentially an unworkable system.

I do not see how the NSW Government can find the funds required to make the current system function. The costs are just too great. On the other hand, I cannot see fundamental change since this requires action to overcome broader systemic and political problems. By political I do not mean party political, rather the way that the NSW community now works.

In this case I think that there will be another patch, some forced change just to keep things going until the next crisis. At some point, however, accumulating problems across the whole system will force radical change.

Friday, May 23, 2008

Appeals to authority and the trap of experience

Over on his blog, Thomas and I have been having a conversation about the value to Australia of a national space program. I am a supporter, Thomas is opposed. I mentioned that I had had an involvement in this area in the past. Thomas accepted that experience, but politely maintained his position.

Thomas was of course right to do so. However, as happens in discussions with Thomas, our conversation took my thinking in a different direction, the problems associated with appeals to authority and the associated trap that can be created by our own experiences.

My mention of my past role in the national space program could be interpreted as an appeal to authority. I have done this, therefore you should listen to me.

At a personal level I am in fact very suspicious of appeals to authority. As soon as x says that I am a scientist or a Government minister, therefore you should listen to me, warning flags go up the mast.

Just because x is a Government minister, a scientist or, for that matter, someone previously involved with the re-establishment of a national space program does not, of itself, make their views valid.

If a Government minister makes an announcement about a new policy, explaining what it is and the reasons why, we can classify this as giving information or opinion. If, as happened sometimes with anti-terrorism legislation, a minister says that we should go along with a change because the Government knew best, then that is an appeal to authority.

Of course we have to take into account experience and knowledge. When Thomas writes about American politics, I read with interest because he knows his stuff. When a scientist speaks about his area of expertise, I listen because he or she is an expert. However, I never accept even expert views in an unqualified fashion. Experts are wrong too often.

Our thinking, writing and actions always draw from our own experience and knowledge. Further, that knowledge is transmuted through the mental constructs that we use to interpret the world or our own fields of knowledge. With time, our experience accretes to our thinking in ever thickening layers like the build up of silt on a delta. The silt can provide fertile crops, but the river itself slows and meanders.

In consulting, we talk about the half life of knowledge as around a year. Consultants mine their own experiences and knowledge in dealing with clients. If they are not adding new knowledge, then they run the risk that the world will have moved on without them.

I frequently refer to my own experiences in writing. Like everybody, I use those experiences to interpret the world. However, I have always to be conscious of the danger that my views may no longer be relevant.

I love history because here I can bring to bear my full range of knowledge and experience in asking questions of and interpreting the evidence. Unlike science where some of the greatest discoveries are made by the young because they have a greater capacity to break out, the writing of history often gains from the silt of experience.

Current events and activities are a different matter. Here we have to decide what experience is still relevant, what must be put aside.

Take public policy and administration as an example. Over the last year or so, I have written about this area a lot, tracing through and interpreting some of the changes that have taken place. I think that I can claim to have a reasonable degree of expertise.

This helps me to interpret and explain. However, it can also be a problem. In dealing with Government systems whether as a consultant, contractor or employee, what is is what matters.
At an operational level, this requires a split personality. All the knowledge of what was, what might be, what should be, has to be put aside because it can interfere with the simple requirement to get a job done. In fact, over ten years ago now I decided to withdraw from consulting to the Government sector because I felt that it had all become just too hard! I wasn't enjoying it.

Drawing this meander to a close, I think that in making and interpreting claims to authority based on experience, it pays to be cautious. Like the old position of engineer on an aircraft, the world may simply have moved on.

Wednesday, May 21, 2008

Writing, blogging and personal obsession

I love writing. As a child, I used to dream of being a writer. My problem lay in the fact that I did not know where to start. Novels, the things I wanted to write, mystified me. How did you develop the plot? Did the characters just take over?

In those days there were none of the writers' festivals or writers' programs that today provide a guide to the craft. I read and read and read. The dark Russians, the strange French, the weird and wonderful world of Science Fiction, all passed through my mind. I read War and Peace at the same time as Enid Blyton.

Part of the desire to be a writer lay in a desire to join the varied, cosmopolitan and very different world that I saw more in writers themselves than the writing. I then put all this aside, apart from a period of wishing to write a novel set in the student world of the University of New England. Writing outside work seemed more like a student essay than a pleasure.

The next time that I started writing independently of direct work demands lay in a combination of work and politics.

You can take the boy out of academia, but you cannot take academia out of the boy.

At Treasury I was trying to build a new area, I was also trying to build the reputation of my area and people relative to the two macro-economic divisions that dominated the Treasury skyline. I took great pride, I still do, in how well my staff did. I wrote policy papers, encouraged others to do so, and held a series of seminars. Outside Treasury, my political involvement meant that I was writing other policy papers as well as newsletters and articles.

Then came another gap. This time the trigger to start writing was my decision to enroll in an external PhD, although writing did really take over until I went to Armidale on a full time basis. My now traditional writing style was short sentences, short paras, keep it as simple as possible.

This was not necessarily right for a biography. I experimented with new forms: longer sentences using colons and semi-colons. Always I read stuff out to test sound. When I first returned, reluctantly, to Canberra to take up my official duties again, I was determined to be a writer.

I kept writer's diaries. I wrote notes and descriptions on visits to Parliament House or to the many factories I saw. Now I decided to write a thriller centred in Australia and on the aerospace industry.

I had a mass of raw material. I looked at the words and interactions in Defence Inter-Departmental Committees. I read the cable traffic, looking at the structure and words. I read the secret reports, looking at the way they were structured.

I visited factory after factory in Australia and overseas, talking to senior management but also looking at incidental details such as the security checks, the structure of the offices, the language used. I studied the factory lines, collected material on particular products such as composites, tried to understand how the firms worked. I flew in helicopters and saw the first satellite ever brought back from space.

Time passed and I put this dream aside because of the need to resume professional writing. Again I wrote a lot outside work, but it was still professionally directed. The writer's diaries themselves were lost in a move.

It was not until I started blogging that the old writing addiction, hidden all that time, really grabbed. Now I cannot stop. Blogging is not the addiction, writing is. I go to bed at night thinking about writing. I wake up in the morning in the same position.

I am, finally, hopelessly addicted. I do not think that there is a cure!

Tuesday, May 20, 2008

In Praise of Australian food

Blonde Canadian wrote in a comment on More ramblings on Australian food:

urgh, mango risotto sounds horrid!

When I was an exchange student in Germany for a year I was often asked to prepare a 'typical australian meal'.They'd get vegemite on toast or perhaps a bbq.

Even those seemed like a cop-out though, being borrowed from other cultures.

Now BC has exactly captured my point. Australian food is in fact wonderful in its ingredients and variety. The problem lies not in the food, but in ourselves. Don't believe me? Well, consider this.

If I was faced by the challenge that BC faced, my starting point would be to look at what my German friends were eating. There is no point in serving things like sausages even though Australia now has great variety in this area.

My second point would be to look at local availability of ingredients. I suspect that some of the things that I might like to use may not be available in German supermarkets.

Then I would have to look at food and wine prices.

Assuming no limit on availability and food prices, and some decent cooking facilities, I suspect that the simplest modern Australian meal that I might offer would be this.

I would start with nibbles.

Nuts (macadamia, cashews among others), crystallised ginger, sultanas and raisins, water cracker biscuits, a variety of Australian cheeses, Australian olives, perhaps a local Australian salami. I might serve this with several Australian sherries, a dry Australian white, perhaps Australian beer given that this is Germany.

I would follow this with roast chicken.

Marinated in lemon and oregano. A stuffing made of bread crumbs, some garlic, diced onion, chopped herbs (rosemary, oregano, thyme, marjoram, sage, pepper and salt) and diced tomato. Roast vegetables - potato, sweet potato, pumpkin, although Europeans tend to think of the last as stock feed. The concept of pumpkin scones is very alien. And the greens. And then the gravy. Crispy skin chicken, stuffing, gravy and roast vegetables. Wonderful!

I would serve this with a sample of Australian whites.

As an aside, my children love this dish if not the wine. I serve it two out of three Sundays!

I would follow this with a desert centred on one of Australia's greatest assets, fresh fruit with cream and perhaps ice cream as well. Here I would serve one of Australia's rather nice desert wines.

Everything in this menu is Australian. It is but one example of what Australian food has to offer!

Monday, May 19, 2008

More ramblings on Australian food

As so often happens, a comment from Lexcen on What would you serve as Australian food? started a new train of thought. Lexcen wrote:

Traditional cuisine develops and evolves over hundreds of years. The introduction of tomatoes occurred in the 16th Century and potatoes around 1700. Chocolate was introduced to Europe by Christopher Columbus. I think it's too early to attempt to define Australian cuisine because our culture is relatively new compared to the rest of the world. And don't forget that Greek cuisine is in fact merely variations of Turkish and middle eastern dishes, probably a result of the Ottoman occupation

Now there is a fair bit of sense in this, but it got me thinking.

Part of my response to Lexcen was that Australian cuisine was simply what we ate, the ingredients used, how it was prepared. Now in this sense there has to be an Australian cuisine unless, and I do not think anybody would argue this, what we eat is so varied across Australia that no pattern exists. So we can, I think, talk about an Australian cuisine.

Now the second thing in Lexcen's comment is that cuisine varies with time. As a further example, where would South East Asian cooking be without chillis? Yet the chilli is a European import introduced from the Americas.

We can see this in Australia. Olive trees came here with early European settlers, yet for much of the historical period olive oil was thought of in medicinal terms. The ubiquitous presence of olive oil in Australian kitchens is very recent.

We know this, and attribute many of the changes in Australian cuisine to the post Second World War mass migration period. This is true, but it ignores another fact: Australian cuisine has changed many times in our short history. It has never been static.

This links to another problem, the attachment of labels. We all like to classify and categorise things. This is a human trait. Yet the labels we attach can conceal the truth about things, or even create new truths.

Two examples to illustrate my point.

In a post on another blog I used the term bush tucker to describe native Australian foods. This led to a very swift correction. Bush tucker, I was told, was a shorthand term for food collected and prepared by our indigenous peoples. Australian native foods referred to all the indigenous ingredients native to the continent regardless of the way in which the food was cultivated or prepared.

As another example, what do we mean by Italian food? Italy itself is a very recent national creation. There are huge regional variations in food within Italy, as there are in history and dialect.

I do not want to make this a long post. I would argue that we should look more at what we do eat, ingredients and preparation, worry less about national distinctiveness. The second conceals the first.


Hard to believe that I have now written 679 posts on this blog. I mention this only because I cannot always remember past posts, but come across them again when searching on particular topics.

Back in March in Sunday Morning Snippets - Thai food, Cedric Emmanuel, Tibet Train Pastiche and Statistics, I mentioned the Australian chef David Thompson who had gone to Bangkok to open a Thai new food centre. Part of Mr Thompson's mission was to try to preserve traditional Thai food in the face of the fusionist on-slought:

The opportunity came after David had attended and spoken very vocally at a food conference in Bangkok in mid-1999. He was "shocked and appalled" by the damage fusion cooking was doing to Thai cuisine. He was confronted by some awful mixtures, such as mango risotto with olive oil, garlic, coconut cream, curry paste and lemongrass stock. He said that the Thais must stop, and try to preserve traditional teaching methods. He blamed European executive chefs in Thai hotels who read food magazines and believe they have to copy to keep up.

I think that Mr Thompson is correct to suggest, as he did, that traditional Thai food centres on home cooking. The same is true in Australia. What we eat at home forms the core of Australian cuisine.

I find it interesting that even in Australia with its relatively short history, we now have what is called modern Australian as compared to traditional Australian. Modern Australian centres on restaurants and is often to my mind a fusionist mess. Traditional Australian can be found in the growing volume of web sites dedicated to preserving and providing past recipes.

The desire for traditional Australian can be seen in the revival of the Anzac biscuit and is a sub-set of a growing nostalgia for Australia's past that sits, sometimes uncomfortably, with attacks on elements of that past. Nostalgia is also linked to a growing Australian nationalism, especially among the young.

While I have written about this before, some elements make me very uncomfortable, I should at some point do as I am trying to do with food, simply describe what I see.

Sunday, May 18, 2008

What would you serve as Australian food?

Photo: Farmers' Market, Orange

Last night I went to the international food fair at Sydney University's International House. This was the fourth time I had been to this annual function. As always, I enjoyed the food, but it did raise a real issue in my mind.

Just to set the scene, I sampled all stalls. With four exceptions, all the stall gave samples of their standard national cuisine. The exceptions were the US, Canada, South Africa and Australia where people focused on what they saw as unique elements in the cuisine. So in the Australian case we had things such as Anzac biscuits and pavlova.

Now I have noticed this before, and I wonder why it is so. Ask a Singaporean to illustrate the food that they eat and you will get standard Singaporean dishes. Ask an Australian and you will get vegemite!

I have noticed the same thing in other areas. Ask an Australian to talk about Australian culture and he or she will struggle to talk about distinct features. Ask an Indian and he or she will talk about Indian culture or cultures. The issue of distinctive does not arise.

So if you were asked to describe or even serve Australian food as food what would you say or do?

I think that the first point I would make is that the raw materials - meat, fruit, vegetables, spices etc - are relatively cheap and plentiful in Australia. So this aids variety in diet. The second point would be that the various ethnic groups in Australia maintain their own cuisines, adding further to variety.

Beyond this, and focusing just on main meals prepared at home, I think that I would argue that most Australian meals fall into seven main groups.

Group one is salads, served with meat or as a main course. If served as a main course, salad is often eaten for lunch, less often in the evening. There is great variety in such salads.

If served as a side dish with meat, lettuce, cucumber, onions, tomatoes and capsicum still dominate, usually with olive oil and vinegar as a dressing. If served as a main meal, both the main ingredients and dressings become much more varied.

Group two is meat - lamb, beef, chicken or pork - grilled, cooked in a pan or on a BBQ. If barbecued, meat is usually served with a salad. Otherwise, there are steamed vegetables, usually potatoes and greens such as beans, peas or broccoli.

Group three is roasts, again lamb, beef, chicken or pork. These are served with with baked vegetables (potatoes, sweet potato, pumpkin), greens and gravy.

Group four is pasta of various types, sometimes served with a side salad.

Group five is caseroles or stews of various types, served on their own or with rice or vegetables.

Group six is Asian stir fries, usually sliced meat and greens cooked together or in separate woks with things such as sesame oil and fish sauce.

Group seven is a wide variety of curries, usually served with rice and side-dishes.

These main groups are affected by many influences.

In many areas fish is an important part of the diet. I won't comment here because I rarely cook fish, so do not claim any expertise.

Then there are the Mediteranean influences.

Oven cooked Greek vegetables may be substituted for conventional baked vegetables or even, with meat such as chicken added, served as the main meals. Italian pot roasts may be substituted for the more conventional oven roast. Kebabs may be served.

Asian influences are also very powerful. In addition to stir fries and curries, most Australian larders now contain various Asian condiments that get used in broader meal preparation, such as the addition of chillies and fish oil to salads.

Modern Australia's time poverty has affected our diet.

One main course has replaced the two or three courses of the past. The varied soups and deserts of the past have suffered, as has the wonderful home baking and preserving that Australia used to know. The anti pastos and cheeses we now have are not, to my mind, an effective substitute.

Breakfast is a much diminished meal. Our diet used to consist of a major breakfast, a very slim lunch, a major evening meal. The big breakfasts of the past have gone except in cafes where people gorge on a Sunday morning. I say gorge because those cafe big breakfasts are in fact far bigger than the home variety used to be.

Take-away (take out in many parts of the world) food is also a feature of the modern Australian cuisine. Here Australia is, I think, well served by global standards in terms of variety and standard. Noticeably, many people seem to buy food that they do not serve at home as a regular feature, adding further variety to the food mix.

I fear that I have only scratched the surface in talking about Australian cuisine. So what Australian food would you serve?

Saturday, May 17, 2008

Classical Music

If I understand the statistics correctly, the proportion of the Australian population interested in classical music is down to less than 10 per cent. To me, classical musical has marked some of the best and worst moments of my life.

I am not a classical music buff like Marcellous. I do not go to concerts. To me, classical music is a deeply personal experience.

When I was packing up 202 Marsh Street, the house that had been my home for 45 years even when I was away, I listened to classical music. A little later as I drove to Sydney leaving behind the hopes and dreams that had formed the core of my being from my earliest memories, I listened to classical music.

None of us can give up the past. It remains, always there. This afternoon I am listening to classic music again. I have been washing and tidying up. I am due to go to a function shortly.

The core issue I face is this: what price am I prepared to pay to try to maintain the integrity of my dreams. A subsidiary issue, not unimportant, is the maintenance of my professional integrity.

The two issues, dreams and professional integrity, are not directly linked. The juxtaposition comes about in part because I am wrestling with the issues at the same time. Yet they are linked because both relate to the same question, what makes me a person.

I do not have an answer. I have to turn the music off and return to the mundane issue of ironing a pair of jeans.

Saturday Morning Musings - everchanging Sydney

Photo: Coast walk, Eastern Suburbs, Sydney

I find the variety in the patterns of human life endlessly fascinating.

Last night was the year 15 dinner, a gathering of parents from eldest's year. Many of the parents are seriously Sydney Eastern Suburbs in the same way that I am seriously Armidale or New England. They were born there, went to school there, have lived there since.

At one point the conversation turned to rock fishing, fishing of the rocky points to be found all along the Sydney coast line from Bondi to La Perouse. I knew little of this, so listened with interest.

Some of Sydney's best fishing is to be found in this strip. However, rock fishing is also very dangerous. Each year an increasing number of people are swept away and drowned.

They talked about the things that needed to be done to minimise the danger. Placing kit in a safe place so that you did not need to worry about it. Wearing the right clothes. Looking at the pattern of the retreating waves so that you knew the danger spots, the maelstroms created by the retreating waves. What to do if you were caught - essentially swim out to sea to avoid being smashed on the rocks.

They also talked about the increasing number of Asian people - new settlers from nearby suburbs - who have discovered rock fishing as a source of fresh fish and can now be found standing on the rocks, sometimes wearing suits and joggers or sand shoes. Those who have grown up in the area and in the water know the patterns of the landscape and of the waves and are all strong swimmers. New arrivals do not and are not. An increasing number die.

Listening to the conversation got me musing again about the patterns of change in Sydney. While I will never be a Sydney person, I have known the city very well for a long time. As an outsider, I can perhaps see the patterns of change more clearly. I am also fascinated by the dynamics of change.

I spoke of parents as being seriously Eastern Suburbs. That phrase itself is a sign of change.

When I first came to Sydney as a child, the phrase "Eastern Suburbs" was largely used to describe the suburbs east of Bondi Road, the main drag from Bondi Junction down to Bondi Beach. This was wealth territory. We used to count the expensive cars, cars rarely seen elsewhere.

Some of Sydney's most expensive private schools cluster in this narrow strip, starting from SCEGS Darlinghurst (really inner city) through Ascham to Scots and Cranbrook. This was also a more Jewish area as compared to the suburbs like Mosman across the other side of the Harbour, although the biggest Jewish concentrations were and are to be found on the southern edge extending slightly south and west of Bondi Road.

South of Bondi Road, the demographics changed quickly. Average incomes dropped, houses became smaller, voters turned from Liberal to Labor. This has been blue-ribbon Labor territory for a long while.

At school and then University I knew all of the subtle nuances that marked the social world of old Sydney, although the world of the Shire or of beachside life such as that described by Clive James were outside my ken.

I should probably write something about this at some point because the old Sydney that I knew has largely vanished. For the moment, I would simply note that as an outsider-insider I could hardly not be aware of Sydney's pattern.

I had family who lived or had lived in various parts of Sydney - Potts Point, Rose Bay, Strathfield, Pymble to name just a few places. I played football against the Sydney schools. My first serious girlfriend was a boarder in Armidale who came from Mosman. I went to parties in Sydney, Sydney people came to the country parties - wool shed dances, Bachelor and Spinster Balls, birthday parties. A close friend's mum came from one of the old dynasties and used to tell me stories of past social life while we sat and drank sherry. My family had an extensive contact network in Sydney. Always the outsider in one sense, I yet moved across the surface of Sydney's varying social seas.

Bondi Road still marks a divide. However, the line that marks the Eastern Suburbs in common parlance - essentially a real estate price dividing line - has been moving south. There are now two Eastern Suburbs. When my wife or daughters talk about the Eastern Suburbs they might - if asked to define it - include the old Eastern Suburbs. In fact, when I look at the patterns of social interaction - where people live, where they go, where they eat, where they drink - it is largely Bondi south.

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Rosebery, where we live, lies at the epicentre of current Sydney social and demographic change.

This is a small mixed industrial-residential suburb that was largely settled by Greek migrants after the Second World War. The Greek influence remains strong. All our neighbours are Greek. However, the tide of change will sweep this away in the not too distant future.

My family looks to the east. Through Kensington, the home of the University of New South Wales where Helen goes, past Randwick Race course where the girls work from time to time, then though Randwick to Coogee and Bronte or the girl's old school.

Coogee, the beachside suburb where the girl's grandmother lives, is a bit less than 6 kilometres away. This is the world of the new Eastern Suburbs, of the changes that have transformed Coogee from a residential area into a beach-side hot spot or turned the Spot into a major entertainment centre. This is also the world of the University of New South Wales, one of Australia's largest universities, whose intake of international students has been large enough to actually change the demographic composition of particular areas.

The Sydney CBD lies just 6 kilometres to the north. In the seven or eight years we have been living in Rosebery, we have seen the creeping edge of inner city gentrification with its wave of apartments move closer and closer.

Two blocks to the west the apartments have crept up Botany Road to Gardner's Road. To the direct north they are now just three blocks away. The Aristocrat poker machine manufacturing complex (Rosebery was the poker machine capital of the world) that formed a three block buffer between us and the apartment wave has been sold. Five blocks away to the north east, Hillsong Church has bought the old Roads and Traffic Authority Headquarters and now plans to build a $40 million mega-church.

With these changes have come escalating real estate prices as people discover Rosebery's previous hidden location. Houses are now more than a million dollars. Rents have increased accordingly.

The picture changes if we look south. Eastlakes lies to the south east, with its mixture of established homes and public housing.

This must be one of the most ethnically mixed areas in Sydney. The local BKK shopping centre is Chinese owned, with a clear Chinese presence. Inside older Greek blokes sit on the benches or in the little cafes and talk for hours. The Woolworths check-out staff are a mixture of Chinese, Greek, Muslims from several different ethnic backgrounds with head covering. Five nationalities can be on the check-outs at any one time.

Just outside is, I think, a Thai shrine. Across the park young Muslim blokes - mainly Balkan I think - with bogan haircuts spend hours inspecting cars - mainly black with big exhausts.

Move to the south west and the picture changes again. The Greek presence re-asserts itself in a several block thick strip along Gardner's Road. A little further south into Mascot we are back in working class Australia. In recent years Mascot and the further southern suburb of Botany have been the only places towards inner Sydney with reasonable rents, if also with very small houses.

Not for much longer, I fear. With the spread of metro Sydney, the locational advantages are just too great.

Further to the south west, just four kilometres from our front door, lies Kingsford Smith International Airport. Despite the proximity, aircraft noise in Rosebery is quite low (a plane is going overhead as I write) because of the flight paths.

The airport introduces another dynamic into the Sydney change scene. Major international airports are huge economic centres in their own right. Out from the airport towards the city spread hotels and, more importantly, offices and service centres of various types.

Following privatisation, the owners want to take advantage of their greatest asset, real estate. Kingsford Smith has become a huge commercial and retail complex. Now the owners want to extend this, leading to major fights over things like road traffic.

Last, let's move to the west. This is the direction I drive most days. Here within a few kilometres of Rosebery we enter the world of what is now called the inner west. As the name suggests, this is a ring of inner suburbs to the west of the central city. This, to me, is the strangest world, in part because I know it least.

Not quite inner city, it shares many attributes with those areas traditionally classified as inner city. Yet it is also different. At the risk of parody, I classify the differences in this way.

To me, the typical inner-westean turns away from country or sea to focus on the urban, is likely to be an environmental theologian (this is Green heartland), has a strong social conscience, is likely to substitute pets for children, is inclined to new age theology and is a strong supporter of popular causes.

Well, I have spent enough time on this post. I do have a life beyond blogging!

Thursday, May 15, 2008

Alcopops, Tim Blair and the Daily Telegraph and the damaging effects of some official English

When I wrote my post Alcopops and mixed drinks - The Head strikes I never expected that the new tax on pre-mixed drinks would become a major budget issue. Yes, I thought that it was a silly decision. It was also ageist and sexist. Now we have the odd position of Opposition Leader Nelson coming to the defence of my daughters. Very strange.

Tim Blair has shifted his blog to a new site as part of the Sydney Daily Telegraph site. Sorry Tim. Of course I knew that you worked at the Tele. But it was still your personal site. Now it is a newspaper site and I am much less inclined to visit.

The evils of official English are much on my mind at present. Not all official English, just some of that found in some current institutions.

In internal writing, including advice to ministers, I have always used the words I and we. I signals that it is my personal opinion, we that it is a group position. No more I fear. Everything must be expressed as though it is the view of some anonymous official body. No personal flavouring is allowed.

Worse, while the official position opposes the passive tense, a tense I greatly dislike, the practical effect of the rules makes the passive tense hard to avoid. I accept that I am old fashioned, but I still feel that (within limits) writing should be fun to do and read. We are meant to be communicating, after all.

Since the Rudd Government came to power a new jargon has begun to creep in. The term "technical paper" is now in vogue. I have no particular problems with this. If I can call some of my writing "technical papers" and it helps me get the material through, then I am greatly in favour. Still, I find the change process interesting.


I could not resist bringing Neil's response to this post up on the main post:

"Two technical papers have been written by someone who may be myself, or they may be plagiarised from some other, but when the passive is used such agency or responsibility may be hidden if this is deemed desirable, which may well be sometimes the case. They may be found if diligent search is made at the following addresses: Overusing the passive voice? and Just the most marvellous book about writing! It is recommended that they be read by all who are entrusted with writing technical papers, no matter by what department they may be employed.

Yours faithfully,

Neil Whitfield BA (Hons) Dip Ed Grad Cert TESOL".

Wednesday, May 14, 2008

Australia's 2008 budget - written from a slightly US perspective

Photo: Australia's new Treasurer, Wayne Swan

Australia's new Treasurer Wayne Swan has delivered the first budget of the new Rudd Government. While I have only done a very partial analysis of the budget, I thought that I had better make some comments now or I might never get round to it!

The comments that follow are obviously my own opinions. I stand to be corrected on errors of fact and interpretation! I also thought that I might write from a slightly US perspective, adding some explanatory comments to aid interpretation of this down under land.

Let's start with the bottom line that has featured in so much coverage, the budget surplus of $21.7 billion or 1.8% of GDP. For the benefit of my US readers, if my maths is correct this is about equivalent to a US budget surplus of around $US250 billion. Since 1970, the US has achieved budget surpluses in just four years, none equal to this figure.

The Australian figure was about what I expected. Wayne Swan had talked about $17-18 billion, so I knew that the actual number must be higher. I have reservations about our obsession with budget surpluses, but there is no doubt that the surplus is within normally accepted conservative norms.

Now one of the things to consider here is the extent of national debt. The US national debt is around $9.4 trillion dollars. I am not sure that I know the exact way that this figure was derived, so I had better be careful. However, thanks in part to Peter Costello, we can say that Australia has no national net Government debt. It's all been paid back.

While Australia has no national debt, we have (like the US) a dreadfully low savings ratio. We also have rapidly rising levels of household debt. The combination means that we as households are spending more than we earn. This translates directly into imports.

As a nation, we have a deficit on the current account that is greater than the US. In the past, Australia had a surplus on the current account (we sold more overseas than we bought), but a surplus on the capital account (we took money from overseas for investment purposes). Now we access overseas funds to support current consumption.

The budget notes, correctly, that the terms of trade (the price we receive for our exports as compared to the price we pay for our imports) has moved in Australia's favour. The budget also postulates that the terms of trade will continue to improve.

I doubt this.

Import prices are rising. I expect this to continue since the structural factors (technology change, the surplus population in key supplier countries) that have aided us are coming to an end. When I look at the demography of China, for example, I see little but emerging labour shortages.

Export prices depend on world growth. This is slowing. We are at the end of a long structural shift. The mills and factories in countries such as China that have fueled our growth will not be able to afford the price increases that we have been able to demand in the past.

I see the failure of the budget to address trade imbalances as a major flaw. Mr Swan would argue that keeping inflation under control, increasing productivity, will address that flaw. I am not sure.

Let's start with inflation. The budget includes a number of measures that will increase prices. Mr Swan would, I think, argue that this will be offset by reduced fiscal stimulus and greater productivity.

Listening to the various commentators, there appears to be something of a consensus that the budget will lead to a mild contraction in demand. I think that this is right, although my first reaction was the opposite. However, that contraction is too small to really affect prices in a downward sense unless, of course, the economy contracts for other reasons.

This is possible. My view for a little while has been that the slowing in demand is greater than people realise. The reason for this is simple. Most economists and forecasters live in relatively protected worlds and deal with statistics. Move outside this world, and you find people who have been worried and under pressure for a while.

Now turn to increased productivity. Productivity changes are necessarily long term. There is little in the budget that will affect productivity in a two to three year time horizon.

Mr Swan made great play about the focus on working families. This jargon is part of a refocusing from the big to the small end of town. Australians are tired of the way in which most of us struggle while a small group at the upper end seem to get obscene wealth.

This does not mean that Australians are opposed to wealth or the chance to get it. Far from it. Yet Australians also feel that the Government should focus on the majority of the Australian population for whom the glow of wealth is, at best, a future dream and have to survive in the meantime. They also feel that Government should protect the weakest.

So the new Government approach appears to have gone down well here. However, I find it interesting chatting around that the two most commonly mentioned positive measures are the tax cuts plus the increased income level on the medicare levy.

By way of explanation for my international visitors, medicare is one mechanism that subsides national health care. There is no US equivalent that I know of.

A previous Australian Government wanting to reduce demand on the public purse decided than Australian should be encouraged to take out private health insurance. The mechanism adopted was a special tax levy on those earning an income above a certain figure who did not take out private insurance.

The decision to substantially increase the income figure for levy purposes is, I think, enormously popular among those who paid the levy because they did not think that private insurance was worthwhile, as well as those who did take out private insurance but who did not feel that they were getting value for money.

The last topic I want to deal with is the severity of the expenditure cuts, something that Mr Swan has really focused on in his speach and subsequent public comments. Having been through the budget entrails, the cuts were not especially severe. Further, some may have been misdirected. But that's really the subject of a further post.

My bottom line in all this? A workmanlike budget overshadowed by hype.