Miscreants On A Mission

The Predictable Drive In To The Ditch

The news this week is that Tony Abbott's poll figures suck more than ever. Hands up if you find his surprising? No? Didn't think so.

The really interesting bit in all of the commentary is how Tony Abbott is trying to characterise his first year and a bit in government by saying there are accomplishments a plenty to go with the things they couldn't get done. In the list are things like the repeal of the Carbon Tax and the Mining tax. He doesn't seem to understand that these taxes weren't some idle notions dreamt up by the Left to destroy conservative Australia, but fairly important planks of public policy, in as much as revenue raising for the government was concerned.

For a guy who came to power banging on about deficits, Tony Abbott sure has't helped himself as Prime Minster if he thought the high points of his government were abolishing taxes that were paying for useful things. It also ignores the great retreat of car manufacturing out of Australia, a sequence of events precipitated by TonyAbbott's own government. The point being, all the accomplishments he lists are things that probably need not ought to have been done, while all the things for which he is receiving blame and rancorous criticism and - let's face it - hollered insults are things also he shouldn't have undertaken especially because they are his ideological projects.

In short he may well claim the glass is half full but it's no good if the fluid in the glass is urine.

The Tricky Submarine Situation

Not a lot of people are standing up to point out the problem with the ASC. It's a shame that the person making the most sense is Paul Sheehan. Maybe it's like a broken clock being correct twice a day, but after he pens his usual poisonous character assassinations of the ALP politicians, he points out something that needs to be pointed out (God knows I hate quoting this man):

"ASC was delivering no submarines in 2009 for $1 billion. They have not improved their output … They are $350 million over budget on three air-warfare destroyer builds. I am being conservative. It is probably more than $600 million but because the data is so bad I cannot tell you. You wonder why I am worried about ASC and what they are delivering to the Australian taxpayer. Do you wonder why I wouldn't trust them to build a canoe?" 

At last the truth about this from a defence minister. Billions of dollars have been poured down the drain by both sides of politics on this giant pork barrel for South Australia. The ASC could build a canoe, but it would cost a million dollars and spend more time in repairs than on the water. 

The ASC has accumulated an abominable record of cost over-runs and should never have been awarded the air warfare destroyer contract. Johnston's refreshing candour was an admission that the ASC has been a financial sinkhole for decades. It is more a strategic liability than a strategic asset. 

Senator Johnston is also the first Defence Minister in a hundred years to seriously confront the bullying sub-culture in the Australian military, which has a recorded history of rationalising these practices dating back to 1913. 

And there's the crux of the biscuit. The ASC has been going for some time chomping up money at a greater rate than desired while delivering sub-standard product (pun unintended). There is no competition for the ASC, so if the Australian government dreams up a product it needs, the ASC is there to take the money and waste it until it delivers a poor product that roughly approximates the brief. It's a happy little monopoly where there is no need to cut costs or make savings.

Yet this very monopoly has led to the notion that Australia should buy ready-made subs off the shelf from Japan, which is causing a lot of heartburn in the ranks of the white Australian sentimentalists. After all, how could we fight them in Kokoda and Darwin and wherever else and suffer the indignities of the Burma railway; and then buy their bloody submarines? Why indeed? The noises coming out of Tokyo and in particular the Maritime Self Defence Service is the mirror opposite where they would rather not part with hard won know-how of how to run proper submarine fleets, just for mere filthy lucre. Why indeed? (And I say, with allies like that, who needs the Chinese?)

It is a rational and sensible idea to buy the submarines from Japan. However it is obvious as daylight that it won't be happening. It's a bit like the high speed railway thing - If they ever decided to do it, they'd have to ask the Japanese to help, and of course, rural Australia would have a fit. It's about as likely as buying Space Rockets from Japan, Fighter Jets from Japan, Helicopter carriers from Japan, Tanks from Japan, small arms from Japan, communication devices from Japan... You get the picture. Cultural sensitivities being what they are, it's going to be "No Jap Sub, No Jap Anything."

And this is before we mention the problem of not having our own industry to build our own defensive wares. Bob Katter knows all about that one.

This leaves the Abbott Government squirming and Defence Minister Johnston twisting in the wind because they don't want to keep throwing money at the ASC. But they need to keep throwing money at the ASC because it's pork-barrelling that has to be done. And while I am a decidedly pinko leftist social democrat sort of dude, I have to say the ALP argument that buying subs from Japan is bad because of job losses in South Australia, seems too much of an endorsement of pork-barrelling.

So what can they do? They ought to split up ASC vertical into three companies and make them compete for tenders for contracts. It's the only way: Break up the monopoly. It's one thing they should be looking at privatising. But you know they won't - and more's the pity.

A Decade Of Pain To Come

This one's from Walk-Off HBP who is probably rightfully worried that things can get worse than merely having a government of miscreants and nincompoops. Yes, it seems if things don't look bad enough now, they can get a whole lot worse.

My worry has more to do with Abbott's economic priorities, which ignore how rapidly the world is changing around the Lucky Country. Although Abbott has talked about diversifying the economy away from its dependence on China, his policies have effectively done the opposite. 

Where the previous government moved to tax outsized mining profits to fund investment in education and infrastructure, Abbott has changed incentives so that commodities and mining companies become a bigger share of the economy and have an even bigger voice in politics. Scrapping plans for a carbon tax, and resisting any serious limits on emissions, has made the economy more vulnerable to international shocks and made Australia a punch line at this week's global climate talks in Lima, Peru.

Instead of undertaking painful and costly restructuring, Abbott has prodded the central bank to loosen monetary policy more and more. Whether all that easy money is pushing Australia toward a subprime-loan crisis has now become a matter of serious debate.
Over the last year, anytime a journalist asked Abbott or Treasurer Joe Hockey about frothy real-estate prices, they were dismissed as nervous nellies. When I probed Hockey myself in September in Sydney, he derided such views as "rather lazy analysis". 

Yet in an interim report in July, David Murray, the former head of Commonwealth Bank of Australia, called the surge in housing debt since 1997 and banks' exposure to mortgages a significant risk. Since that time, Murray's panel said, "household leverage has almost doubled," and "higher household indebtedness and the greater proportion of mortgages on bank balance sheets mean that an extreme event in the housing market would have significant implications for financial stability and economic growth." 

On Sunday, in the final report to emerge from his yearlong inquiry, Murray urged specific reforms, including cuts in much-loved housing tax breaks. The report called for "unquestionably strong" capital levels, which could force the four biggest banks to keep another $25 billion on hand for a rainy day.

It's a bit long but then, the list of things the miscreants and nincompoops are doing is long. What can I do? Some times I think we must look like idiots to the world. Here we are donning the hair shirt of unnecessary austerity and going around pretending that Global Warming isn't real. It's not exactly a government of integrity and clear-thinking that we've voted in for ourselves.

Clearly we're idiots.