The devastating double leak

Cabinet leaks are never fun. Unless you’re on the other side of the chamber and can dine out for weeks at a time on the information. There’s a couple of things alarming about the recent leaks, both regarding petrol.The first leak regarded Martin Ferguson’s objections to the Fuel Watch scheme inside the apparent sanctity of Cabinet; and he was forced to front the press with an admission of arguing against it in Cabinet, but he backed the policy as Cabinet had decided it. Embarrassing.

The second, and in my opinion far more damaging, appeared last night in a Laurie Oakes exclusive. It showed that several departments (Finance, Industry, Treasury and the PM’s own DPM&C) had provided advice that the introduction of the Fuel Watch scheme nationally would impose high compliance costs on independent retailers, and eventually have an upward influence on prices rather than the opposite.

The FuelWatch scheme has at its centre an idea to set the prices the night before and not have them change for the duration of the day, under threat of fines and other penalties. Even if this is on a day by day basis, it resembles the introduction of a price floor and a price ceiling, which tends to disrupt prices. The effort of attempting to collate prices from across an entire nation is admirable, but by forcing service stations to set their prices in advance may preclude consumers from accessing fuel at the lower prices. Over the course of say, a week, the average price will be set for the entire week; eliminating the fuel price drop on Tuesdays. Is this really going to help working families*, who know of that lower price?

The Government has firmly relied on the economic modelling from the ACCC, but newspaper headlines around the country suggest he has actually misrepresented the advice. A highlighter was passed across the table in Question Time yesterday, which asked the PM to highlight the relevant sections of the ACCC report, an offer that was passed up. Kevin Rudd was shuffling papers like a casino croupier, putting them into different piles on the Table.

But back to Cabinet leaks. It’s very worrying to have a Cabinet leaking this early into the life of a government. The electronic system for circulating Cabinet papers may not be as secure, or the bureaucrats who had their advice ignored got angry. All sensitive leaks are investigated, but the culprit is often never found. Which leads to the suggestion that Ferguson himself may be angry about being overridden in Cabinet, or that his criticism was not given a fair hearing. Marn’ being of the Victorian Left, could this be the factions reasserting themselves. If their views aren’t respected, they may leak.

As I recall, the various incarnation of the Howard Government rarely leaked, as Howard made sure that each of the opposing views was heard, even if he didn't act on it. Cabinet was tight. If every minister's decision is leaked, it just encourages discussion out of cabinet. Ironically, the corridors of Parliament House are far less secure than the Cabinet Room. As petrol prices continue to rise, maybe a bit of panic is settling in. After the Opposition's divisions on the excise, it must be a welcome change to have some disunity in the government.


*If I hear the term working families once more from Kevin Rudd, I’m liable to put a brick through my television.

The apology is in order, but how much will it cost.

Australia recently got something off its chest, an apology for acts perpetrated on its indigenous people, removing aboriginal children from their families and placing them with 'white' Australians or creating them state wards. Many feel the apology it is certainly a step in the right direction, and ends a period where a government flatly denied apologising for something that was not directly doing. Kevin Rudd put it this way:

"We have to remove the great stain on this nation's sould. It's time for fresh ideas for Australia's future."

A change of tack from where John Howard had previously stated:

Australians of this generation should not be required to accept guilt and blame for past actions and policies over which they had no control

It would to unwise suggest that he had no care for the aboriginal people, the draconian intervention in the Northern Territory, to protect many from dangers within their own communities, has started to bear fruit:

Cynthia Watson is one of 100 people who live in the Mount Nancy aboriginal township on the fringe of Alice Springs, one of the towns covered in the legislation. Police and soldiers have replaced town drunks, and Watson, 25, spends her welfare on feeding her four children, aged 2 to 11.

"No more grog means we have fewer fights,'' said Watson, who is camping with her children in Canberra.

There is a place for acknowledging mistakes in politics, and the concensus was heartening, many in Australia and around the world feel that Australia has matured a little after the apology has been given.

When I was younger, I remember listening to a speech in legalese from a QC, who explained that governments are much the same as private companies when it comes to the continuity of its legal form. A change of government does not equate to a dissolution of partnership, but moreso to a change of directors. Hence an admission of past liability does open a government up to legal preceedings. That QC is likely to be offering his services pro-bono to pursue the case: I remember him saying in particular nothing can be done until the governments makes some sort of admission. You'll forgive me for not remembering the the case law he was relying on.

The West Australian Aboriginal Legal Service has already started preparing a test case, which in the case of it suceeding, would today's twenty-somethings paying towards something that did not occur in their generation. The sums being bandied about vary.

Swept up in their goodwill they may have forgotten the consequences of such an admission. Howard surely saw this, and maybe his reasoning for not offering an apology was not only based on his sense of egalitarianism, but also on the future impact of apoligies on the nations' finances. I'm not saying it would be the only reason though.

Cabotage: Sabbotage or Sage?

Is the Australian government showing its first signs of shifting left, despite its promises of economic conservatism?

KEVIN Rudd will clamp down on overuse of foreign-owned ships to transport freight around the nation's coastline in a bid to bolster the shipping industry. The Prime Minister is also set to require foreign vessels in Australian waters to observe an International Labour Organisation convention guaranteeing fair pay and conditions for all seafarers. In a shift in approach from that of the previous Howard government, Labor will review coastal shipping laws to uncover ways to lift the domestic shipping fleet's share of the domestic freight market from its current level of about 80 per cent.

The last I remember of the ILO was when they scuttled attempts to man the wharves in Australia with non-union labour, circa Peter Reith and the early days of the docks crisis. The Maritime Union of Australia, at the time on the receiving end of those reforms, will certainly be the main beneficiary. Paddy Crumlin, the MUA secretary was certainly excited after meeting with Albanese:

"He said we'd be going back to the platform."

The platform in question consists of some ambiguously worded resolutions from last year's Labor national conference. My concern here is the inflationary effect of higher wages on the dockside (and at sea) being passed on to consumers and aiding inflation which is already rising. It is of such concern that the former Razor Gang could now be renamed the Axe Gang. Furthermore, as foreign operators are locked out of operating domestic cargo routes, a regime of quasi-protectionism begins to appear. Cabotage is not a good policy for a government that had promised to be freer of union influence than its predecessors, and this looks suspiciously like payback.

Explanation of Cabotage: The right of a country to operate internal traffic, especially air traffic, using its own carriers and not those of other countries

Update: Preview Clip from the ABC(AU) dramatisation of the events on the waterfront.

Media Performer of the Week

The timing of the Federal election in Australia, and the change of government before the first sitting of parliament creates a vacuum, which can be filled with other news, or politics can be firmly put on the agenda. Kudos then to new Assistant Treasurer Chris Bowen, who has managed to inject himself into debates and even occasionally trump his boss, Wayne Swan.

The member for Prospect in Sydney's East, and member of the NSW Right faction, has excelled where his predecessor Peter Dutton always lived in the shadow of Peter Costello. Appropriately, Dutton has been given a shadow finance shadow position.
Let's take a look:

January 13 2008
The Age: Whale hunt on as Greenpeace finds Japan's killer ship
Restraint urged on both sides of the conflict.

January 12 2008
The Australian: Labor to hunt wealthiest tax cheats
Rich tax cheats to be targets.

The Age: Decline no reason to raise rates: Bowen
Reserve Bank independent, but US market troubles should not have banks raising rates.

Herald Sun: Costello to challenge Nelson?
Jumps on Costello for not making clear his leadership ambitions, and hedging with a Macquarie Bank position.

Sydney Morning Herald: Ad crackdown to 'add balance': govt
Airlines and Telcos would need to advertise more inclusive prices so as not to deceive customers

January 11 2008
Fin 24: Clampdown on price-fixers
Cartels face jail time for colluding.

January 10 2008
Money Management: Govt to undo tax changes
With regard to clearing up the treatment of scrip for scrip transactions

So for creating more news than the Treasurer, he wins the Media Performer of the Week, although politics tends to have few performers, so there is no guarantee this will be awarded every week. He can't be accused of being lazy. In the guise of a boxing title belt, consider Bowen to hold the title unless someone outdoes him.