Malcolm Turnbull : Right Man, Wrong Process

In the last election, it was with a heavy heart that I voted Liberal.

It’s not that I am fundamentally incompatible with an Australian “conservative” agenda, after all liberal is supposed to be pro-business (and I am pro-business) but I also didn’t see the appropriate level of commitment to major issues like climate change and the environment, same-sex marriage and immigration. Anyhow, my general attitude towards the role of government in business is “stay off the pitch” and Australia is a country that is remarkably successful despite decades of mediocre policy around key business drivers like taxation and economic diversification.

As such, a “pro-business” party is a bit of an oxymoron in this country, anyhow…

I never cared much for Abbott. Although not a lightweight by any stretch of the imagination, he just doesn’t epitomise what a modern Australia needs to be vibrant, successful and competitive. But he was a hell of an improvement over the K-Rudd infighting and Labor party shenanigans, and his steady, resolute demeanour at least implied the potential of a period of government stability, free of intra-party political wrangling. Of course, we don’t vote for the “man”, we vote for a government, but I think leadership truly matters. To be clear (in case you forgot) as a country we didn’t vote for the ALP because we felt that Kevin Rudd had established a toxic culture in his party. Therefore to offhandedly dismiss “leadership” and “personality” as disconnected is naïve and frankly incorrect.

I admire Malcolm Turnbull. He’s smart, he’s accomplished. He has a trait that very few senior figures in politics have these days, namely a stellar track record of doing anything other than politics (Mrs. Turnbull is no slouch either). Just about any advanced economy these days suffers from the pervasive mediocrity of the career politician, individuals that have accomplished little of note since they first took office in a student politics club at university. Well, other than perhaps foster their sense of self-importance and entitlement to rule. The formula of a modern politician is that of a nanny bureaucrat, incapable of even remotely envisaging the concept of “nation building” because he/she has never created, built, innovated or produced anything, let alone a vision of how to make a country great.

This is not Turnbull. Not by a mile.

The problem is that in carrying out the latest palace coup, the only possible message the Australian Liberal Party can send to the populace is “we are no better than Labor”. In fact, it is worse than this because it also suggests a particular contempt for voter perception of party political infighting given what we went through during the last election. This latest development just highlights a true lack of recognition in Australian politics that a government is elected to serve the Australian people, not expend its energy on petty political infighting.

So, instead of focusing on the critical issues that face our country, we will have yet another week dominated by intrigue, media attention and one-upmanship. It was always going to be a quiet week in Parliament but with such enormous issues facing our economy and the urgent need to consider Australia’s role in key international issues, this leadership change only illustrates – to Australians and the world – how insular, irrelevant and undemocratic we really are. It also means that instead of directing our resources toward things that matter, we will undoubtedly spend billions more in political machinations that add zero value.

Right man for the job. Wrong process of getting there.

Asylum Seekers and the Destruction of Australian Values

Australia recently enacted a set of laws that are intended to stem the tide of asylum seekers arriving by boat to Australia’s northern shores. We also now have regular radio and television commercials – 24/7 – informing “friends and family” of citizens and residents that illegal immigrants, refugees and asylum seekers are not welcome, specifically “tell your friends and family they are not welcome here” (paraphrased). In fact, this media campaign – delivered in dulcet bass tones – emphasizes that not only are asylum seekers unwelcome, but they will be repatriated to Papua New Guinea (PNG) under a new deal between Australia and PNG (although recent news headlines suggest that this may be under review by PNG).

I take issue with this policy (and this oppressive media strategy) for several reasons.

Firstly, it sends the wrong message to Australia’s immigrant population, particularly from Asia. What is effectively being said is that the countries that many of our immigrant communities originate from (often unstable, politically complex and poor) only expatriate criminals and undesirables. “Tell your friends and family they are not welcome here.” Where is the social inclusion, where is the recognition of our multicultural heritage? Where is the understanding that a functioning sense of community stems from family stability and completeness?

Where is the recognition that Australia is no longer a bunch of white British settlers, but a vibrant and connected part of Asia? The fact that this is clearly part of electioneering by the ALP is even more disturbing.

Secondly, it is immoral to take the position that every person who arrives on our shores is merely a criminal or an opportunist. As a society we need to remain open to the idea that there are legitimate refugees and legitimate asylum seekers. If we are prepared to deploy our military forces to protect “human rights” (and all political modulations thereof) of Afghans and Iraqis, East Timorese and Vietnamese (yes, “that war”, remember?), then we have to be prepared for the human displacement that occurs as a consequence. When we send troops into a conflict zone and expect that the only human movement will be to adjacent borders, we have fundamentally failed to understand the modern world we live in.

Thirdly, with all of our technology, intelligence and legal process, surely we can delineate between a criminal and a genuine refugee. Perhaps when we make sweeping policies about the status of refugees, what we are really saying is that – immigration treaties with PNG aside – we don’t have enough regional integration and cooperation to make an effective determination. In other words, these kinds of draconian policies simply illustrate how weak a “citizen” we are in the Asia-Pacific community and little we understand the neighbours.

The “read-out” for our diplomatic and human rights success should be how the stem of refugees reduces because of effective regional inter-governmental cooperation and human rights intervention. That’s where we should be spending the money and the effort. The wasted billions that will be spent on pointless policies to curb the “flood” are merely addressing symptoms, not the fundamental problems.

Moreover, I say let them come. If they have no criminal record and if it can be shown that they cannot return to their country without persecution (thereby, frankly, legitimizing their claim of refugee status), then let them stay. It will put pressure on the government to be a part of improving regional human rights, to ensure that refugees are not refugees simply because the repercussions of deportation back home are too severe.

We should perhaps also acknowledge that the extraordinary risk these people take to come to our shores, says something about who they are and what they are made of. Yes, if they are criminals then turn them back, we shouldn’t be indiscriminate. But if they are just people looking for a better life, let’s use 1,000ds of kms of ocean as the litmus test of being worthy to stay and welcome them instead of persecuting them on unfamiliar soil. I’m not saying there isn’t a cost – but ten or twenty thousand refugees a year aren’t going to destroy the country. We have robust statistics that say a foreigner is more likely to start a business or launch an entrepreneurial venture than a local. Could a steady flow of (mostly young) people even be good for the economy and even diversify the labour market?

Mexicans in California and Eastern Europeans in the UK help to keep inflation down a point or two … why not us? Moreover, $4.6Bn to deter, intercept and process less than 20,000 refugees seems like an awfully ineffectual equation. That’s more than $230,000 per refugee???

As for the PNG situation – this is hilarious to me and it even underscores the government’s limited vision. Notwithstanding signs of cold feet, I think PNG would be very wise to take Australia’s refugees because it needs and wants to increase its population. It needs labour. It needs people to exploit its (enormous) natural resources. It needs to people grow its economy. Taking Australia’s “unwanted” could actually be a pretty savvy way of bringing people to a country that most people don’t have anywhere near the the top of their personal immigration list. It needs to have the blessing of the international community (which it currently does not) and it would need to be made to work effectively and humanely … but it could work.

Politically, this whole fiasco was certainly a wasted opportunity to build a stronger relationship with PNG, rather than position it as a just an alternative to Nauru. I suspect that the bad press PNG is getting will pressure the situation because it appears to the international community like a ‘disposal’ of human rights. My view is that the government should have given asylum seekers a choice. Either they can stay in Australia and put into an integration program (by that I mean health, language, education) as quickly as possible – with some performance metrics attached to it (like passing a basic English test within 12 months) – or the government provides a stipend and an airfare to Port Moresby. Executed efficiently and cooperatively, it could possibly even be an effective part of Australia’s aid program to PNG where dollars would be leveraged with human capital. It would probably even have knock-on benefits to Australia’s economy because of the domestic investment and expertise that participates in PNG’s resources sector.

Their growth = our growth.

But most of all, I value the fact that Australia is diverse and multi-cultural. Maybe one day my son will fall in love with someone from Afghanistan or Myanmar. How would I explain to my children or my grandchildren that we failed to help people in need? Are Australians really that xenophobic and racist? This is an opportunity for Australia to really shine, to show that the Australian people are compassionate and embrace basic human rights, which in turn gives our county political currency and influence in the region in a manner far beyond that of digging stuff out of the desert and shipping it to China.

I write a lot about entrepreneurship and I believe in taking calculated risks to accomplish big outcomes. Perhaps this is the reason why the asylum seeker situation offends me – these people want the same thing, a high-risk chance of a better life.

Is it really so different?

Australia’s tragi-comic electioneering : daily update

I promised, back when I commented on the closure of the Ford plant, that any kind of stupidity was possible in an election cycle. Well, today we have seen it in all of its glory with Rudd’s announcement of a $500m subsidy to the car industry. Certainly, in recent weeks, both the ALP and the Liberal-National coalition government (the “Coalition”) have made great strides in articulating how they plan to drive Australia into the ground.

ALP: $500m for the car industry

The car industry directly employs 45,000 people in Australia. According to FAPM – it indirectly drives a quarter of million jobs, but this is likely to be a bit of spin because roughly 65% of “direct” employment is in the components section of the industry, which has also application outside of the automotive space.

But let’s say it does employ 250,000 people.

As an average Australian, you just paid $2,000 per worker to keep the industry alive. For a lot of Australians, that is a significant amount of money. If you are a skeptic like me, and reckon it’s more like 50,000 jobs, then it’s $10,000 per worker. Post Tax.

What’s tragic about this, is that your money doesn’t actually go to guaranteeing the employment of “workers” – the standard ALP justification for the subsidies – it essentially goes to the balance sheet of global multi-national companies in order for them to be able to make the profits to justify maintaining what would otherwise be an unviable industry in Australia. In other words, your tax dollars are being sent offshore.

I promised you that stupidity was possible, Kev & Co. delivered it in spades.

Coalition: Scrap Mining Taxes, Scrap Carbon Taxes

… but, as Abbott has repeatedly stated, keep the expenditures/benefits in place.

How can it be?

Either this means that there will be austerity measures elsewhere (my guesses : healthcare, education, humane treatment of asylum seekers for a start) or Abbott’s government plans to borrow a lot of money during the next term. Certainly, sustained economic growth probably isn’t a realistic scenario. Years of comparative isolation from global fiscal turbulence is not serving the Australian people well in terms of the quality of decisions being made in light of global economic trends. In my view, the government is simply incapable of fathoming what is heading towards us because unlike their US and EU counterparts, they haven’t practically had to deal with it the past 5 years or so.

To me, it is also remarkable – verging on immoral – that an election campaign can be won on the basis of the promise to scrap taxation on mining. What does this mean for ordinary Australians?

Let me tell you in the most simple terms.

It means less revenue into the government coffers to provide you with quality services and infrastructure. Like health. Like education. Like roads and schools. Like public transport. Even “Australian” mining companies (like BHP) no longer contribute to the Australian economy the way they once did, so what it really means is that not only are fewer $s being retained in Australia for the benefit of Australians (and not just spent within a fiscal year, but invested for the future) but that once again, it’s about maximising the profits of a few companies. That’s not what governments should be doing – that’s what companies should be doing.

No changes to GST either, people. That’s not as good as it sounds, you know…though it is marginally more justifiable with the weakening of the Australian dollar and it’s probable impact on the retail/services sector.

But still. That is a dangerous election promise to make.

And the Carbon Tax. Why has this become such a dirty term (pardon the pun)? Yes – the Gillard government screwed it up and yes the Carbon Tax was not implemented or priced correctly, but it could be a very effective mechanism for driving industry reform and transforming efficiency. It could be of dramatic benefit to the country if it were (re)implemented correctly and could drive new industries that would eclipse the automotive industry in less than a decade. The problem with the Carbon Tax is that it is a “tax” – and that clashes with Coalition propaganda. For the avoidance of doubt, if anyone thinks that the cost of living (energy, for example) is going to get cheaper because this tax is abolished, they are delusional.

To Conclude…

I’m not even going to get started on gay marriage (recent shocking and inappropriate Abbott comments), asylum seekers (both governments are disgraceful) or environmental policy (non-existent as an election issue). Let’s just focus on the finances.

By the way, I’m not an economist and I don’t – as a general rule – care much for them, whatever their value may be. Neither am I some kind of dye-in-the-wool socialist. I just believe that to have the best future, the strongest economy, a prosperous society and peace – we need to have a bigger vision for Australia than propping unviable industries that are political vanguards (like the automotive industry). Moreover, our elected government needs to be strong (bold?) enough to claim the benefits of [responsible] exploitation of our Wide Brown Land for its people.

Today, and for tomorrow.

Honestly, it’s enough to make you vote Green.