Centre for Policy Development's Blog, page 112

Ben Eltham | Turnbull Makes Sense on Climate

Malcolm Turnbull's sensible, moderate speech on climate change last night was important. For starters, his defence of science exposed Abbott's shoddy distortion of the debate, writes Ben Eltham.

Originally published at New Matilda.

You've got to hand it to Malcolm Turnbull. He might boast an ego the equal of anyone in federal politics — surely an accomplishment in itself — but he is never less than eloquent when it comes to expressing his own opinions.

No-one on the conservative side of politics has yet been able to describe the issue of climate change as succinctly as Turnbull did last night, when delivering the inaugural Virginia Chadwick Foundation speech, in memory of the state Liberal minister of the same name.

"The question of whether or to what extent human activities are causing global warming is not a matter of ideology, let alone of belief," he said. "The issue is simply one of risk management."

The phones must have started ringing in Tony Abbott's office almost immediately. In mounting a passionate defence of the science of climate change — indeed, of reason in political debate — Turnbull has struck a blow at Tony Abbott, the man who replaced him as opposition leader.

After all, it is Abbott who has been all too happy to embrace the siren call of irrational rage and conspiracy theory in his quest to tear down Julia Gillard and get his hands on the office of the prime minister. It was Abbott who marshalled disquiet among the climate denialist factions of the Liberal party to challenge Malcolm Turnbull in November 2009, when a deal with Kevin Rudd on the CPRS had already been done. It is Abbott who has regularly tweaked his message to appeal to those who don't believe in climate change, whether it be regional audiences seduced by Ian Plimer, or seniors enraged at Julia Gillard.

And yet, what was remarkable about Turnbull's speech last night is how unremarkable it was. Believing the scientists? Protecting the environment? Perhaps not burning quite so much coal? This is hardly a radical agenda, as Turnbull pointed out with references to Margaret Thatcher, an early supporter of action to address climate change.

"If Margaret Thatcher took climate change seriously and believed that we should take action to reduce global greenhouse emissions," he argued in last night's speech, "then taking action and supporting and accepting the science can hardly be the mark of incipient Bolshevism."

But that's the problem with climate change politics in 2011. In large part because of politicians like Abbott, the issue has become so thoroughly politicised that many conservative voters really don't believe Australia's top scientists. They really do see a sincere attempt by the government to embark on a moderate reduction in Australia's greenhouse gas emissions as a kind of conspiracy to withdraw liberties and increase taxation. In short, they are irrationally angry.

And one of the key stokers of that conservative rage has been the utter political expediency of conservative politicians like the leader of the Opposition, and his cheerleaders in the media. Driven by ruthless ambition, Abbott in recent times has entertained few qualms in his pursuit of the government, to the degree where he has been willing to attack the government with virtually any weapon available.

Much like the US Republicans, the Liberal Party in Australia has recently seemed surprisingly content with advancing positions that clash with the legacy of the party's more noble traditions of reason and prudence in a libertarian assault on the foundations of government itself. It is hard to believe Robert Menzies, with his firm beliefs in the value of conserving and preserving social institutions and the common wealth of the nation, would support any of the current Liberal rhetoric.

In recent weeks, Abbott has attacked economists for not supporting his risible "Direct Action" plan on climate change, as well as scientists who have disagreed with his analysis. He has talked down the economy in an effort to exaggerate the impact of the government's carbon tax, even arguing recently that it will cause house prices to fall.

There have been few in the mainstream media willing to hold Abbott to account for his wild overstatements. One of them has been the ABC's Stephen Long, who examined Abbott's claims on the carbon tax in a brilliant report for the ABC's PM program this week.

Long pointed out that the Opposition Leader has been "aided and abetted by journalists who've continued to report unchallenged claims that appear to contradict facts."

Long singled out Tony Abbott's claims that the carbon tax would be "toxic" for the economy, and that it would shut down the coal industry. There is no factual basis for either argument. According to Long, "every credible analysis including the industry's own says the coal industry is going to enjoy a massive expansion despite the Government's carbon price."

Long's piece appeared before Tony Abbott appeared to walk away from the Opposition's 5 per cent emissions reduction for 2020. Abbott has since restated his commitment to that goal, so perhaps his speech to seniors in Queensland was simply another example of his self-confessed tendency to make things up under pressure.

It's a tendency Abbott will have to work hard to reign in over the coming months and years, particularly if the government's fortunes in the opinion polls improve. Given that they could hardly get any worse, it seems likely that eventually the political tides will start to turn against Abbott, if only because the law of averages suggests that his charmed run cannot continue indefinitely (as Kevin Rudd discovered at the end of 2009, after of the most favoured series of opinion polls in Australian political history).

If and when that happens, we know that Malcolm Turnbull will not be shy about putting his own leadership claims forward.

 

 

Ben Eltham | A Close Look at Abbott's Direct Action Plan

While Labour's opinion polling is hitting catastrophic levels, that shouldn't give the Coalition's policies a free ride. Ben Eltham explains how the Coalition's Direct Action carbon policy will introduce a "shadow price for carbon", critiquing the veracity of Tony Abbot's claim that a carbon tax would be "toxic" for the economy and would destroy the coal industry. As the Direct Action Plan's pledge to reduce Australia's CO2 emissions is 60% based on soil sequestration, Ben concludes that the Coalition's carbon plan "obviously won't work", and is based on "incomplete science, dubious economics and breath-taking political expediency".

Read Ben's article here.

Originally published on The Drum.

 

Ben Eltham| How Murdoch Keeps it In the Family

The phone hacking scandal in Britain shines a light on lax corporate regulation. Ben Eltham explains how this helped the Murdochs maintain such a firm grasp on News Corp around the world.

Stop for a moment and ask yourself: how can one family control one of the most powerful media organisations in the world?

A family that owns less than a eighth of the company, by the way, but which still effectively controls its board and executive by virtue of its ownership of around 40 per cent of the so-called "Class B" shares. We'll get to the Class B shares in a minute.

Media companies are notorious for being family businesses. The Packer and Murdoch families have controlled their respective media empires for three generations. Over at Fairfax, John B. Fairfax can trace an even older lineage. The controlling interests in these powerful shapers of public opinion can tell us many things about contemporary society: the role of the media in shaping power in our democracy, the enduring advantage of inherited wealth, and the sham that is "corporate social responsibility".

Much of the media coverage of the phone hacking scandal — and there's been some very good coverage, from this piece by Guy Rundle to the thoughtful commentary of the Guardian journalist, Nick Davies, who pursued the story for so many years — has revolved around media ethics, and the rights and responsibilities of media organisations to gather material and intrude on lives. Today in New Matilda you can read journalist Wendy Bacon's analysis the phone hacking scandal in the context of media ethics and press regulation in Australia.

With the arrest of Rebekah Brooks and the resignation of Les Hinton, News Corporation has plenty of questions to answer on this front. But the story of how one man has been able to control the corporation so ruthlessly is also an illuminating story of how lax corporate regulations can aid and abet corporate malfeasance.

Throughout his turbulent career, Murdoch's corporate manoeuvres have always shown tactical flexibility combined with a disdain for the normal ethics — if any really exist of managerial behaviour. As Jeff Bercovici writes in a Forbes blog, Murdoch is "more akin to a monarch than an ordinary CEO ". Any and all legal — and as we are finding out, illegal — measures have been exploited to the full.

News Corporation, as the holding company, owns or part-owns many subsidiaries around the world, such as News Limited here in Australia and News International in Britain. The corporation is an enthusiastic user of tax havens and corporate secrecy jurisdictions: Paul Barry reported in February that, according to US regulators, "News Corp had 152 subsidiaries, with a big flock in those delightful Caribbean holiday spots, the Cayman Islands and British Virgin Islands. This was more than any other major US company apart from the two big banks, Morgan Stanley and Citibank."

The scale of some of this corporate tax dodging was highlighted recently in a long-running case between the Australian Capital Territory and News Limited, which had issued News with a $84 million stamp duty bill after a shady $9 billion share transfer to the Bermuda Stock Exchange via a Murdoch-owned company called Karlhoft. The ACT eventually won the case, with News settling with the ACT 's Revenue Department for $77 million. News, however, kept the settlement secret and didn't report it in its December accounts.

Long-time Murdochologist Neil Chenoweth has extensively documented the ability of Murdoch's various corporate restructures to minimise tax while maintaining an iron grip on management control of the empire. In his book Virtual Murdoch, Chenoweth wrotethat News Corp paid an average corporate tax rate of 6 per cent between 1986 and 2000.

The reason Murdoch can continue to control News Corp with only around 12 per cent of the shares is because of the structure of News Corp's share registry, which divides its shares into two classes, "A" and "B". The A class shares are anything but top of the class, conferring no voting rights at the Annual General Meeting and hence no say in who sits on the board. The B class shares, around 30 per cent of the total, are the only ones that confer voting rights, and Murdoch and his family control by far the largest stake. As a result, Rupert Murdoch is not only the Chairman and Chief Executive of News Corp, he also effectively controls who the other directors are.

And the reason News Corp can issue Class B shares is because of lax corporate regulation.

Like the majority of the top 500 US banks and corporations, News is incorporated in the American state of Delaware, a notorious corporate haven. The role of Delaware corporate law in allowing corporate manoeuvres like poison pills and anti-takeover statutes is well known. According to British financial journalist Nicholas Shaxson, who investigated tax havens in his recent book Treasure Islands, the state of Delaware grants "corporate bosses extraordinary freedoms from bothersome stockholders, judicial review, and even public opinion."

The scale of the Murdoch family's ability to do what it likes with the corporation was graphically demonstrated in the recent acquisition of Elizabeth Murdoch's film and television production company, Shine. The deal, worth £415 million, sees News Corp acquire 100 per cent of Shine, and will give Elizabeth a seat on the News Corp board.

Investors were not happy. Despite the legal hurdles facing stockholder action against Delaware-registered corporate management, a lawsuit is indeed in the works. The suit alleges that News Corp didn't even pretend the deal was about the best interests of shareholders. Instead it argues that "Murdoch publicly proclaimed that his purpose in entering into the transaction was to bring Elisabeth back to the family business." As Alison Frankel at Reuters reports, the suit has since been revised to incorporate material related to the News of the World scandal.

"The board's refusal to inquire into whether Murdoch loyalists had implicated News Corp [in phone hacking and bribe paying] further confirms its complete inability and unwillingness to cross him, much less to make the hard but necessary decisions independent of Murdoch's personal demands and desires," the complaint says.

The web of influence that Murdoch and his family are able to wield through the octopus tendrils of News' various controlling interests is vast.

Take Lachlan Murdoch, who has not been involved in any of the British shenanigans. Lachlan remains a director of News Corporation, and was Rupert's former CEO of the Australian newspaper subsidiary News Limited. He also owns and effectively controls two of the most significant radio and television networks in Australia in DMG and the Ten Network. In fact, he remains the acting CEO of Ten.

All of this is legal. But is it good for Australian democracy? As the University of Technology Sydney's Thomas Clarke argues today, "Australia's cross-media ownership regulation simply is not working to achieve the principles of media access, freedom and diversity that it is supposed to protect."

Let's not believe News Limited boss John Hartigan that everything is fine in the Australian arm of the organisation. As I argued last week, News is a rogue organisation. It has lost its social licence to operate. It should be broken up, sold off and divested, for the good of democracies across the western world.

While we're at it, Australia's cross-media regulations must be strengthened, and Communications Minister Stephen Conroy must find someone willing to use the media regulator ACMA 's considerable regulatory power to actually enforce its own rules.

Originally published at New Matilda.

James Whelan & Anna Long | How many bureaucrats are enough?

James Whelan and CPD intern, Anna Long publish an extract from their chapter, Attitudes to the Public Service, in The Canberra Times, Public Sector Informant.

READ the entire article How many bureaucrats are? here (first published in The Canberra Times Public Sector Informant).

James Whelan & Anna Long write:

"The public service's detractors have failed to establish the need to cut APS employee levels.

Despite speaking highly of the APS, former Labor leader Kevin Rudd also referred to growth in APS staff during the latter years of the Howard government as 'administrative bloating'.

The size of the Australian Public Service generates heated political debate. Anti-public service commentators typically resort to the 'big government' frame to promote the idea that the APS has too many employees. Conservative politicians, researchers and think tanks assert that the APS has grown excessively and that, as a consequence, Australian citizens are over-regulated and excessively taxed."

READ the entire chapter Attitudes Toward the Public Service.

NEW REPORT: 'Public servants of the highest calibre'

Senator Kim Carr recently asserted that public servants "of the highest calibre" are necessary to achieve "ambitious goals for a richer, fairer and greener Australia".

Do the 160,000 Australians employed in the 133 agencies that comprise the Australian Public Service meet this standard?

CPD research reveals polarised views of the public service: while citizens express confidence in public services and a preference for a well-funded public sector, some politicians and other public service commentators paint a much less positive picture and advocate 'axing' services.

CPD's public service researchers have examined twenty years of attitudinal surveys and political commentary. Our synthesis is published in Attitudes Toward the Public Service, the second installment in our upcoming State of the Australian Public Service: An Alternative Report.

DOWNLOAD the extract from our upcoming report HERE.

Join the conversation with CPD about the Public Service

If you want to hear more about this report and our research, consider joining us at one of our roundtables in Sydney (23 August), Melbourne (30 August) or Canberra (6 September). Drop James a line at James.Whelan(at)cpd.org.au if you are interested in participating in this discussion.

Stay tuned for more on ideas from CPD's Public Service Program.  Sign up for our email updates, 'like' us on Facebook and follow us on Twitter.

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Public service in the news | 19/7/11

Green public sector on the rise > A green brigade of bureaucrats assigned to environmental programs around the country has grown by 20 per cent since Labor won power four years ago. And the commonwealth public service has breached some of its own energy-saving targets, with the Canberra headquarters consuming 25 per cent more electricity than a decade ago…

Abbott's direct action plan on carbon is friendless > The public servants would need to have excellent up to date knowledge on all cutting edge technologies designed to reduce emissions as well as excellent knowledge on almost all production techniques currently carried out in Australia in order to accurately assess the applications… How the Coalition would juggle the number of public servants needed with its commitment to reduce the public service is puzzling…

Meanwhile in the United Kingdom, mixed responses to 'Big Society'…

Perfect storm in public services can be weathered > David Cameron's plans to open up the public sector gives us a chance to show good quality services and value for money.More people than ever need help and support, and deciding how best to provide it against the backdrop of cuts and political maneuvering is a huge challenge…

Open public services: Privatisation or innovation? > What will opening Britain's public services to competition mean? From my point of view, this looks like a pretty frightening prospect. The idea of opening up all of our services to competition is ultimately a route to massive privatisation…

 

 

 

 

 

 

 

 

 

 

 

PUblic service in the news | 19/7/11

Green public sector on the rise > A GREEN brigade of bureaucrats assigned to environmental programs around the country has grown by 20 per cent since Labor won power four years ago. And the commonwealth public service has breached some of its own energy-saving targets, with the Canberra headquarters consuming 25 per cent more electricity than a decade ago…

Abbott's direct action plan on carbon is friendless > The public servants would need to have excellent up to date knowledge on all cutting edge technologies designed to reduce emissions as well as excellent knowledge on almost all production techniques currently carried out in Australia in order to accurately assess the applications… How the Coalition would juggle the number of public servants needed with its commitment to reduce the public service is puzzling…

Meanwhile in the United Kingdom, mixed responses to 'Big Society'…

Perfect storm in public services can be weathered > David Cameron's plans to open up the public sector gives us a chance to show good quality services and value for money.More people than ever need help and support, and deciding how best to provide it against the backdrop of cuts and political maneuvering is a huge challenge…

Open public services: Privatisation or innovation? > What will opening Britain's public services to competition mean? From my point of view, this looks like a pretty frightening prospect. The idea of opening up all of our services to competition is ultimately a route to massive privatisation…

 

 

 

 

 

 

 

 

 

 

ANZSOG Conference 27th – 28th July Putting Citizens First Engagement in Policy and Service Delivery for the 21st Century

July 27th and 28th The Westin Sydney

Putting Citizens First – Engagement in Policy and Service Delivery for the 21st Century – will again offer a forum for participants to learn from high quality, senior level strategic thinkers, providing both practical, case based presentations and opportunities for discussion and networking. Attracting a variety of engaging and insightful presenters from Australia, New Zealand and beyond, the event promises to be not only stimulating but have real applications at the policy coalface.

Keynote presenters include

Beth S. Noveck

Professor of Law, New York Law School and Former United States

Deputy Chief Technology Officer (2009-2011) and leader

of the White House Open Government Initiative (@opengov)

Donald F. Kettl

Dean and Professor at the School of Public Policy, University of

Maryland and non resident senior fellow at the Brookings Institution

Gerry Stoker

Professor of Politics and Governance, School of Social Sciences,

University of Southampton

To register for this conference and see the program please click here

 

Miriam Lyons | The Long Carbon Jouney: Q&A and Panel Discussion with PM Julia Gillard

Green Capital presents Prime Minister Julia Gillard making keynote address and Q&A on climate change policy in Australia. CPD's executive director Miriam Lyons sits on the expert panel discussing  "What's next for a sustainable future?"

How will business start to change if it costs more to pollute and there are market rewards for being clean? Who'll deliver the investment, innovation and infrastructure to enable the transformation to a low-pollution, sustainable economy?  Can the political system sustain the effort over the decades?

Miriam Lyons  will be voicing  a strong message on the action needed from Australia's policy makers, politicians, community visionaries  and business groups to craft a sustainable future.

The date for your diary:  8am, Monday 18 July  2011

Venue: Sheraton on the Park: Grand Ballroom 161 Elizabeth St on Hyde Park, Sydney

Click here to find out more

 

 

Ben Eltham | The Black Hole In Labor's Carbon Tax

International offsets are a huge part of the Gillard carbon tax – but the climate change minister is still nutting out the details of how those schemes will work, as Ben Eltham found out.

Originally published at New Matilda.

How much carbon pollution will actually be reduced by the Gillard Government's carbon tax? If you've been following the debate, you'll have the Prime Minister repeat the figure "160 million tonnnes" a number of times, which, she is keen to point out, is the equivalent of taking "45 million cars" off the road.

The figure comes from the sophisticatedeconomic modelling performed by Treasury for the carbon policy. The Treasury models suggests that to meet Australia's target of a 5 per cent cut in greenhouse gas emissions by 2020, we're going to have to emit around 152 million tonnes less pollution.

But it turns out that the majority of this abatement does not come from Australian industry or consumers — or from Australia at all. According to Treasury, 94 million tonnes of that 152 million tonnes will come from "internationally-sourced abatement" (see the graph, obtained from Treasury, below).

 

Australian carbon abatement projections from domestic and international sources. Source: Department of Treasury

In the graph above, the bars in yellow represent the amount of carbon abatement that will come from domestic Australian activities. The bars in blue represent the international abatement. As you can see, Australia plans to meet its pollution reduction targets primarily by purchasing reductions in carbon emissions from overseas.

Section 5.2.2 of the Treasury modelling document explains why. "While pricing carbon cuts domestic emissions, it is inefficient to meet the whole abatement task through domestic abatement," Treasury writes. "Purchasing recognised international permits leads to real reductions in global emissions, just like reducing our domestic carbon pollution."

In other words, buying carbon credits from other countries is cheaper than achieving the same cuts domestically — and the least-cost strategy for reducing carbon emissions is the entire point of a carbon price.

So what is this "internationally-sourced abatement", and how will it work?

The broad outlines are already known, and indeed some international schemes are already in operation under the UN's Kyoto Protocol (which is, however, also about to end). In principle, the idea is quite simple: because a tonne of carbon emitted in Gabon has essentially an identical warming effect to one emitted by Hazelwood power station in Victoria, it should be possible to reduce carbon emissions globally at the least cost by, say, preventing a forest from being cut down in a developing country.

The Kyoto process has a strategy for achieving this, called the Clean Development Mechanism, which "allows emission-reduction projects in developing countries to earn certified emission reduction (CER) credits, each equivalent to one tonne of CO2. These CERs can be traded and sold, and used by industrialized countries to a meet a part of their emission reduction targets under the Kyoto Protocol."

The UN also has a scheme in place to prevent deforestation called REDD, which stands for Reducing Emissions from Deforestation and Forest Degradation in Developing Countries. In theory, these mechanisms should allow for the orderly and well-regulated international trading of carbon credits, as they are often known, allowing polluting companies in Australia to offset their emissions here by buying up cheap carbon abatement in poorer countries.

But, as ever, the reality on the ground is rather different. Carbon trading is wide open to rorts. A 2008 paper by Stanford University academics David Victor and Michael Wara examined more than 3000 projects in the Clean Development Mechanism, and concluded many of them didn't represent genuine emissions reductions. "It looks like between one and two thirds of all the total CDM offsets do not represent actual emission cuts", Victortold the Guardian back in 2008.

The Clean Development Mechanism has also been criticised for the way developing countries can "game" the system. In one case that came to light last year, a number of chemical companies in developing countries appeared to be actually increasing their production of certain greenhouse gases in order to cash in on the lucrative carbon credits available by committing to "reduce" their production at a later date.

Carbon markets themselves have faced their own issues, with a recent World Bank report on the state of the international carbon market describing a dramatic collapse in volume in the world trade since the global financial crisis. "This bodes very badly for the countries we are trying to help," the World Bank's envoy for climate change Andrew Steer told reporters. "The [carbon] market is failing us."

The REDD program has plenty of critics too. Norway recently signed a $1 billion deal with Indonesia to lock up tracts of rainforest and peat land to prevent carbon emissions. But as New Matilda's Angela Dewan reported here and here, enforcing forestry regulations in a developing country is a fraught process. "The Indonesian Forestry Ministry is regarded as deeply corrupt, and a number of forestry officials have been investigated for accepting bribes to allow illegal logging to continue," Dewan wrote in 2009. This year, she interviewed Louis Verchot, a senior scientist at the Center for International Forestry Research, who told NM that the Norwegian deal may not halt deforestation because "a lot of permit-holders have land that is just sitting there undeveloped. Over the next two years they are likely to continue clearing that land".

Similar criticisms have been leveled at the 2009 deal Norway signed with Guyana, which is also a highly corrupt country in which forestry regulations are difficult to verify and enforce. Some green groups believe timber exports from Guyana have actually increasedsince the 2009 deal with Norway was signed.

So how will the Gillard Government deal with the thorny issues of verification of international credits? New Matilda put a number of questions regarding international carbon credits to the office of Climate Change Minister, Greg Combet. The answers were not encouraging.

A spokesman for Minister Combet told NM that "international units available under the Kyoto Protocol's flexibility mechanisms (which are already traded internationally) will be eligible for compliance purposes, subject to specific qualitative restrictions to ensure that only credible units are used."

The Minister's office also confirmed that REDD permits may potentially be eligible in the future.

"Decisions regarding changes to eligibility for compliance of international units will be determined in the lead up to flexible pricing in 2015 and beyond. The Climate Change Authority will play a key role in advising on the integrity of international units, including recommending any additional units which should be accepted and any units which should be prohibited. The Authority will consider the robustness of relevant national and international validation/verification processes when making recommendations on which international units should be eligible."

 

You can read New Matilda's questions, and the Minister's answers, in full here. As you can see, much remains to be finalised. About the best that could be said of the government's response is that they're aware of the issue and plan to work on it.

The decision to include international permits from "credible trading schemes" like the EUand New Zealand may look like the Gillard Government is strictly regulating the matter, but as we've seen, many of the projects in developing countries financed by the European ETS are of dubious value in actually reducing greenhouse gas emissions. As a result, it may well be that carbon credits from Europe that are sourced from fraudulent or misreported emissions reductions sources could flood into the Australian market. We don't really know.

What we do know is that many Australian banks are already gearing up to arbitrage and speculate on carbon markets, including the Macquarie Group. We also know that Australia's own emissions will actually increase. As economist Frank Jotzo pointed out this week, Australian domestic emissions will rise by 12 per cent to 2020 on 2000 levels, with all of our greenhouse gas "reductions" coming from the purchase of international credits.

"An outcome like this is unlikely to satisfy many environmentally concerned citizens," Jotzo wrote.

All of which makes the verification of international carbon abatement the single most important part of Julia Gillard's carbon policy. Let's hope the new Climate Change Authority knows what it's doing.