Greens NSW MP Dr Mehreen Faruqi: 'Power Privatisation Locks NSW Into Road Congestion and Private Takeover of Rail'
Contrary to the expectations of many people living outside of New South Wales, on 23 March 2015 the Opposition Labor Party led by Luke Foley lost the state elections to incumbent Liberal Premier Mike Baird. This was in spite of Labor Party's opposition to privatisation and a grass roots trade union and community campaign against privatisation. 1
In part, the Liberal Party's victory was due to Michael Baird being able to convince some voters that his proposed sale of 99 year leases of the state's electricity network to the private sector was somehow different to privatisation. In her speech of 2/6/15 to the NSW Legislative Council (Upper House), Greens member Dr Mehreen Faruqi, shows that for corporations intending to buy the 99 year leases, as well as the consumers and current owners of the NSW electricity network, there is little practical difference. The Youtube of Dr Faruqi's speech is embedded below and the transcript of the speech from the NSW Legislative Council Hansard is also included. 2
Dr Mehdi Frauqi's NSW Legislative Council speech opposed to privatisation (2/6/15)
Dr MEHREEN FARUQI [6.41 p.m.]: On behalf of The Greens I contribute to debate on the Electricity Network Assets (Authorised Transactions) Bill 2015 and the cognate Electricity Retained Interest Corporations Bill 2015. I thank The Greens members and activists; Dr John Kaye, who has led the fight on The Greens' side; and all the hardworking "Stop the Sell Off" campaigners and union members who have been leading a strong campaign against the sell-off of our public electricity network. It is a disgrace that the arrogance of this Government means it is not willing to listen to sense or public opinion on this issue. This legislation will enable the lease of 49 per cent of the State's electricity network. The word "lease" is misleading; it is de facto privatisation. It is telling that the lease is so long–99 years, in fact–that no-one voting on the bill today will be alive to see this asset revert to public hands, if it ever does. The decision made today robs our children and our grandchildren of public assets. It is a very bad strategy to get rid of these assets and forfeit the resulting revenue that would otherwise flow into the State budget to be used to benefit the people of New South Wales.
Not many in this Chamber will be surprised to hear me describe this move for what it is: completely backward policy. Privatisation of public assets and services fails the community and the "public good" test. Public assets must remain in public hands for the good of us all and for the good of our State. These are assets that generations of Australians have paid for. Once they are sold off, they will not be able to be brought back into public ownership. Handing over our electricity assets to private operators will effectively rule out any large-scale move towards compatibility with innovative energy systems–systems that are green, clean and renewable. Dr Kaye wrote in the Guardian this week that the Baird Government ignores the recent "sea change of technology" in the energy distribution area at its peril. The release of Tesla's battery units is a game changer for everyone. The profit model of the corporate owners of the grid leases will simply not be compatible with supporting a shift towards the local trading of electricity. There is an incentive not to make our grid more efficient and more sustainable.
Members in both Houses have described as a sham the inquiry into this issue that has taken place over the past few weeks. It was an investigation with a predetermined outcome, with narrow terms of reference and no real expectation that it would produce anything other than a positive story for the Government. Indeed, why would the Government have agreed to such a process if there was any serious risk of it jeopardising its privatisation agenda? The issue at the heart of this matter is that this is short-term thinking by a Government that sees benefit in flogging off public assets and getting some short-term cash in advance. That leads me to the issue of expenditure. Perhaps just as worthy as criticism of the lease itself is what the Government is putting on the table as potential investments in order to justify the sell-off. I am concerned that much of the proceeds of the sale will go towards projects that are ill suited to the needs of our State. Particularly close to my heart is the expenditure on roads and transport.
The Government intends to spend almost half of the $20 billion raised by the sell-off of poles and wires on transport infrastructure that will not work for Sydney and will not work for New South Wales. It will not work and it is not in the interests of the long-term future of New South Wales because it effectively locks down a future of road congestion and pollution for the State, and locks us all into a privately operated, unintegrated rail network along the way. Like the electricity sell-off itself, these plans are not in the public interest; they are in the private interest. They are in the interest of the Liberals and The Nationals and their mates. A massive $7 billion will be directed to the Sydney Rapid Transit line. This line is possibly the biggest rail con job in the history of the State. Sydney Rapid Transit involves the extension of the private North West Rail Link shuttle through North Sydney and the city and onto the Bankstown line, with entirely single-deck trains, privately operated and separated from the current Sydney Trains network.
It seems very recently that the Government had us all scratching our heads over its plans to rip up the recently opened Epping to Chatswood line for its private metro service and incorporate the line into the North West Rail Link. The Epping to Chatswood line was only opened in 2009–as many in this Chamber would remember–for $2.4 billion, under the previous Labor Government. Despite the bloated price tag and the failed ambition of extending the line all the way to Parramatta, this is a good service. It works for people, especially those in the North Ryde and Macquarie Park industrial areas and students attending Macquarie University. It is well patronised and efficient, but the Government wants to rip it up to make way for the privately operated shuttle.
With Sydney Rapid Transit on the table, thanks to the sell-off, we know that the Government's ambitions do not stop there. It also wants to rip up the Bankstown line completely and put the privately operated network through there too. This will cause unnecessary and painful disruptions for people on many parts of the network. But the "short-term pain for long-term gain" argument does not hold much weight here either. Unfortunately, there is going to be short-term pain for more long-term pain. There is no doubt that we will need a second harbour rail crossing in the future. We need to look at new services and new capacity.#fn3" id="txt3"> 3 This can be achieved in some part through technology, such as automated signalling, and in some part by expanding the current public transport system, not cannibalising it. The single-deck, low-capacity Sydney Rapid Transit is probably the worst way possible of achieving what we want. It puts in train the wholesale privatisation of the rail system in Sydney, from Rouse Hill to Epping, to St Leonards, to the central business district, to Sydenham, to Marrickville, and all the way through to Bankstown. What is worse, the single-deck service does not even make sense capacity-wise for much of that journey.
The DEPUTY-PRESIDENT (The Hon. Trevor Khan): Order! I note that, while wide latitude is extended to members speaking during the second reading debate, Dr Mehreen Faruqi should ensure her comments are within the leave of the long titles of the bills. I have allowed the member to continue for some time, but I now invite her to consider the legislation that is before the House rather than rail lines.
Dr MEHREEN FARUQI: Thank you, Mr Deputy-President. Of the constituents the Government spoke to regarding the sell-off of the poles and wires, I doubt many knew about the second harbour rail crossing being a private line and cannibalising their current train line. Moving on to the wasteful expenditure of the money acquired from the privatisation of poles and wires, $1.1 billion will go to the WestConnex extensions and a new western harbour tunnel, which will spew further traffic into more of Sydney. It is not enough that billions of dollars are being totally wasted on toll roads that are not solving Sydney's transport problems but more money from the sell-off of a public asset will be thrown into producing more congestion in the city and destroying our environment.
In essence, the community loses profits from a public asset and these will be spent on private motorways for the benefit of private companies. The Transurban Group, which owns roads in all the eastern seaboard capital cities, made a profit of $282 million in the last financial year. This is a textbook example of corporate greed–the transfer of wealth from the public to benefit only a few. Fortunately, there is another way. During the 2015 election campaign The Greens outlined our own way of financing $20 billion through a range of measures, including reinstating the vendor duty, restoring marginal poker machine tax rates and maintaining stamp duties on certain business transactions. This money would be invested in schools, hospitals, energy, housing and transport of the twenty-first century. The Greens showed that through smarter spending we can divert $4.5 billion being wasted on the NorthConnex and WestConnex projects to public and active transport that expands access for the people of New South Wales. We do not have to sell the electricity network. We can get the infrastructure that New South Wales wants and needs by keeping its electricity network in public hands. The Greens strongly oppose the legislation.
#fn1" id="fn1">1.#txt1"> ↑ In part, Baird's victory was also due to the whiteanting of Luke Foley's campaign by elements within the Labor Party, including former NSW Labor Premier Bob Carr and former Labor Prime Minister Paul Keating. See
Former premier Bob Carr crashes in on the debate over privatisation of electricity networks (7/3/15) Daily Telegraph, The Debate: should NSW's poles and wires be privatised? (23/3/15) | SMH, Mike Baird's caution on privatisation may affect NSW voters (8/3/15) | AFR.
Bob Carr's undermining of NSW Labor in 2015 is reminiscent of his undermining of Federal Labor Party's election campaign in 2004 as described by former Labor Leader Mark Latham in The Latham Diaries (2005). See also Ex-Labor treasurer downplays NSW privatisation boost (19/5/15) Herald Sun.
#fn2" id="fn2">2.#txt2"> ↑ In some parts, the words in the transcript differ to a small degree from Dr Faruqi's actual spoken words, but meaning contained in those words is virtually identical.
#fn3" id="fn3">3.#txt3"> ↑ Dr Faruqi's claim that a second harbour rail crossing may be necessary could be taken as a presumption that Sydney's population will continue for some years to come to increase at its current rate of growth. In fact, if Sydney does not achieve population stability in the near future, no amount of government investment in the second harbour rail crossing or other infrastructure can prevent Sydney from from becoming a miserable urban slum for most of its inhabitants.
The irony of the Vietnam War versus the Australian Property Bubble
The conventional political wisdom at the time was that the North Vietnamese “Commos” were simply part of a larger Communist “Empire” led by Mao Tse Tung; the Chinese Communist revolutionary and founding father of the People's Republic of China, which he governed as Chairman of the Communist Party of China from its establishment in 1949 until his death in 1976.
The War was controversial and based partly on something called the “Domino Theory”, which meant that Australia was exposed to the threat of invasion by the Communist Chinese. Once the Commos took South Vietnam we were done for.
Today Australia faces the irony of an “invasion” by the Capitalist Chinese. Their money is invading Australia.
They are buying houses and farms in order to exploit opportunities for profit, including removal of food from Australia. We have empty houses throughout the suburbs of capital cities that may have been purchased to diversify some foreigner's asset portfolio.
Australia’s politicians, supported by the ABC, provide the Australian people with no reasonable option by way of public policy debate. The ABC just reports what is happening instead of challenging the logic.
It’s all about the wealthiest lobbying for “growth”. People like Paul Keating were praised for “deregulating” the Australian economy in the early 90s and cutting down tariff barriers. The Liberals fully supported these theories.
In 2000, with the Australian Dollar at around 50 US cents, the import duty on foreign cars was around 5%. By 2008 the Australian dollar had risen to around 95 US cents. Similar rises had also occurred against all major currencies. In order to maintain the competitiveness of the Australian car industry at a level comparable to year 2000, the tariff would have needed to rise to 78%, because US Dollar priced cars had become so much more competitive.
This was free trade (?) combined with a rigid tariff structure that ignored the integral part that the exchange rate played in defining competitiveness. What drove the Australian dollar so high? Surely this was a combination of factors driven by Government policies including:
- Extreme population growth driven by mass migration
- The population policy driving demand for everything, including housing
- The population policy creating a dilemma for the Reserve Bank’s interest rate policy. There is a conflict between the need to use high interest rates to resist house price inflation and the need to reduce Australia’s exchange rate using low interest rates. The Government and Reserve Bank have failed miserably in achieving a coherent outcome. Some of the blame must surely be attributable to the extreme population growth policy
- The FIRB’s failure to manage the impact of foreign investment on the long term "interests" of the Australian people by supporting foreign investment in all its forms
- The delusionary thinking that convinces both economists and politicians that GDP growth must be driven by population growth despite all the KPI’s that suggest that this may not be true. These include adverse trends in unemployment, homelessness, productivity, infrastructure funding, Federal budget growth, GDP growth per capita, and environmental impact. In fact there is arguably not a single KPI that clearly supports extreme population growth
So what is driving extreme population growth? It’s really quite simple. Politicians are addicted to dumb GDP growth and fail to perform the due diligence analysis of the facts that might lead to a better understanding of the extreme population growth problem in Australia.
The ABC fully supports this failure by claiming the issue is “not newsworthy”.
Big business loves it because it drives short term profits. No other criterion is substantially or actively used to drive the decision-making of big business.
If the Government can neither evaluate nor comprehend what is in the national interest; what hope is there for Australia's future?
Kleptomania and the Contract State: the political threat to Melbourne’s liveability (Article by Kenneth Davidson)
The last time I spoke to Protectors of Public Lands Victoria at the AGM in 2011 I made the subject of my talk ‘how PPPs can make you sick as well as poor’. I looked at the financing costs of building three hospitals – The Royal Children’s Hospital, the Royal Women’s Hospital and Bendigo General Hospital - and the difference between funding exactly the same hospitals, using exactly the same architects and builders but financing them with government debt rather than as a PPP would save the Victorian taxpayer $90 million a year or $3.5 billion over the 25 year life of the PPPs.
Those figures were based on official interest rates of 5.5 per cent. The cost would be even higher today when the state government could use its AAA rating to borrow at 3.6 per cent. I pointed out the $90 million in unnecessary payments compared to government borrowings would be sufficient to pay a salary increase to public hospital nurses an additional $3,000 a year – a 5 per cent increase. This is far better than chiselling their conditions and undermining hospital safety by increasing patient ratios and replacing professional nurses with nurse assistants in the name of productivity offsets.
When you multiply these sort of deals through the financing of government schools, the desalination plant, Southern Cross (Spencer Street) Station and roads and now prisons, rail links, rail corridors and Metro Rail Link (redesigned without a business case to facilitate Crown Casino and a new real estate development at Fisherman’s Bend), you are beginning to talk real money.
According to the budget papers, PPPs, listed under long-term borrowings as finance lease liabilities, now total $7.8 billion. The interest expense on these leases, listed as finance charges on finance leases, total $770 million. This is equal to an interest expense of just under 10 per cent.
In money terms this amounts to about $500 million or half a billion a year more than if the leases had been financed by the issue of state government bonds, currently yielding 3.6 per cent interest.
The banks and superannuation funds which profit from investing in PPPs rather than public debt promote the neoliberal mythology that governments can’t ‘afford’ debt, even though there are numerous examples of social and economic infrastructure which can yield returns well in excess of the cost of borrowing.
In their own businesses, if directors took the same approach to financial management as they demand from government, to minimise debt to the point where they were missing out on profitable investments, the directors and senior managers would be threatened with dismissal for running a ‘lazy balance sheet’ either through a takeover or shareholder revolt.
But, in Australia the politicians who facilitate the PPP industry are seen generally as wise leaders whose financial rectitude, while promoting ‘tough’ decisions, is in the public interest.
The former Member for Melbourne and Finance minister in the Rudd government, together with former Labor Prime Minister, Paul Keating, are senior financial advisors with the investment bank, Lazard.
When Tanner joined the bank shortly after the 2010 election his job description included working on how to improve the PPP tender process. Lazard has already made one submission to the Victorian government offering to manage the PPP process for both sections of the East West Link Project last year. The proposal was rejected.
The peak industry lobby for the PPP industry, Infrastructure Partnerships Australia, sponsored a conference in March 2012 at the Crown Casino on the subject “user pays, exploring the myths of free infrastructure”. As could be expected the conference wasn’t about the cheapest and most effective ways of financing infrastructure, but how to make PPPs risk free to the private investors to avoid recent losses, particularly involving toll roads.
Tanner was the Keynote speaker. He said that there have to be more innovative ways of financing PPPs to restore confidence in the PPP vehicle following the success of the City Link. He gave the example of the Peninsular Link which substituted an “availability charge” yielding an assured 11.5 per cent for tolls because there was no way the $760 million investment could be sustained on tolls given the likely traffic volumes.
His citing these two examples of successful PPPs makes it clear that the proponents of PPPs are primarily interested in a contract which guarantees a stream of earnings over two to three decades at interest rates two to three times the long-term bond rate without any risk to the proponents.
The background to these successful examples of the PPP method of financing infrastructure shows that PPPs amount to rorts.
It is a moot point whether City Link should have been built. A rail connection to the airport could have provided greater benefit to Melbourne at a fraction of the cost. In terms of passenger numbers Tullamarine Airport is the biggest in the world without a rail link to the city.
Toll charges are at least three times the level which would be needed if the road had been funded by government debt. City Link is one of the most profitable toll roads in the world. In 2012-13 City Link toll revenue totalled $499 million. The operator, Transurban, is allowed to increase toll rates by 4.5 per cent a year or the inflation rate, whichever is the greater. The toll growth compounds at a greater rate than inflation so that a Tulla 24 hour pass is 110 per cent higher now than when the tollway opened in 2000.
The project cost was $1.8 billion but $600 million was mainly capital costs associated with the PPP. For instance $171 million was allocated to Equity Infrastructure Bond distributions during the construction phase before one car had passed under a transponder. Another $350 million was allocated to items such as Consultancy and Sponsor Recovery Costs, Corporate Overheads and Marketing (during construction), and Capitalised Interest Expense.
The Design and Construction Contract was $1.2 billion. This is the main cost which would have been associated with the building of exactly the same road, using the same designers and construction contractors, if City Link had been let out to public tender and financed by public borrowings at the long-term bond rate.
The gross return of $499 million in 2012-13 on $1.2 billion is about 42 per cent. On the assumption that operating expenses, maintenance and taxes more than halved the gross return to 20 per cent, this is still five times the return from tolls needed to fund public borrowings at 4 per cent.
In 1999, Alan Stockdale, Treasurer at the time of City Link negotiations, later announced his retirement from Parliament and his intention to join Macquarie bank as the chairman of the bank’s asset and infrastructure group after the election but before he handed in his commission as Treasurer to the Victorian Governor.
The Australian Financial Review (7th October 1999) said: “As a non-executive director, he was likely to receive a remuneration package in the order of $500,000 a year. Mr Stockdale joins an inner circle of executives at Macquarie whose main role has been described in the banking fraternity as to essentially ‘meet and greet’.”
But PPPs became on the nose after a spate of infrastructure projects financed as PPPs in Queensland, NSW and in Victoria’s case, the EastLink, failed to live up to the optimistic forecasts of toll revenues and investors in the Connect East franchise (set up to build, own and operate EastLink) lost money.
In order to restore investor confidence in these vehicles, the main rationale for the higher returns on PPPs compared to the cost of financing infrastructure with government debt, namely that the ‘risk’ would be transferred from the taxpayer to the private partners, was turned on its head.
The Peninsular Link PPP was developed in the wake of the failure of the EastLink to meet its traffic projections. EastLink was the road from nowhere to nowhere.
It was clear only months after EastLink began operations that the franchise was dying under its burden of debt. Hence the urgency to connect EastLink up to additional traffic to keep its backers from pulling the plug, as had occurred with toll roads financed as PPPs in Sydney and Brisbane. The banks refused to finance the construction of the bypass unless the risk was transferred from the private partners to the government.
Instead of the PPP revenue being derived from tolls it was decided the revenue would be paid by the government via an ‘availability charge’ This meant that providing the Peninsula Link is fit for purpose - i.e. it is maintained in a condition sufficient to carry the volume of traffic for which is was designed - an ‘availability’ payment of $92 million a year will be paid over the 25 years of the franchise, irrespective of how many vehicles use the freeway. It is equivalent to a return of 11.7 per cent on the $760 million cost to build the bypass.
The reader might ask why the government did not borrow the money itself at the long-term bond rate, which was about 5 per cent at the time the road was built and saved $54 million a year or $1.4 billion over the 25 year life of the PPP. The savings would have been sufficient to finance borrowings of $800 million, sufficient to build a public hospital or finance 5,000 elective surgery operations in public hospitals.
But there’s more. The capital cost of $760 million of the four lane tollway, mainly over flat reserve land, works out at $28 million a km. The Abigroup built the Peninsular link. The Abigroup also built 41 km four-lane Geelong Bypass freeway for $19 million per km and it includes a railway station and 100 metre bridge over the Barwon River involving major earthworks. The construction cost of the Peninsula Link is 67 per cent more expensive per km than the Geelong Bypass. Why?
The reason is the Commonwealth put up most of the money for the Geelong Bypass. It refused to put up money for the Peninsular Link because it couldn’t pass a Benefit Cost test required by Infrastructure Australia. As the Commonwealth put up the money for the Geelong Bypass, it ensured it got value for money.
The Victorian government appears to be bent on creating ‘rent-seeking’ opportunities for construction companies and financial institutions rather than meeting the transport needs of the community.
The Mornington Peninsula and the Hastings area are public transport deprived and both the catchment areas include some of the poorest households in Greater Melbourne with acute, unmet public transport needs. But there is already a further study extending the road capacity to relieve congestion on Point Nepean Road completed in 2013 with no consideration of mode shift to public or active transport. Remember, the Peninsular Link was set up by a Labor government.
Labor has not changed its spots in opposition. In a desperate attempt to win back the Melbourne seat from the Greens it promised to oppose the EWL but it would not refinance the debt because it would create ‘sovereign risk’. Garbage! There is no difference between a government refinancing debt to take advantage of lower interest rates than a mortgagor taking advantage of lower interest rates to refinance the house mortgage.
The major parties were as one in refusing to consider refinancing the AquaSure desalination PPP contract on the grounds of ‘Sovereign risk’.
To add insult to injury, Aquasure received permission from the government to renegotiate the debt for its own interests. It has taken advantage of the lower rates to increase its own profits.
Shadow Treasurer, Tim Pallas, has since backed down in the face of the talk by adjunct professor of Law at the ANU College of Law and author of a standard text on government contracts, who pointed out anybody, including governments, can break contracts subject to damages.
The cost of damages would be miniscule compared to the cost of going ahead with an EWL PPP, especially if the Labor opposition made its intentions clear before any contract is signed so that the private partners would know the risks before entering into the contract.
Former US Attorney General: US (& Australian) sanctions against Iraq are genocidal
Keating and the legitimisation of Suharto's dictatorship in Indonesia
This article identifies a tendency internationally to desensitize the public to the mass-murder by Western-supported governments of whole peoples whom they find inconvenient. Australia has a history of cultivating 'wilful blindness' to these events in our neighborhood, under the leadership of powerful government figures. Geoffrey Taylor here draws our attention to an example of such a complex attitude in an interview with Paul Keating last year. [This article started out as a response to Tigerquoll's comment, "Willful Blindness in East Timor, Sri Lanka, and now West Papua".]
This article identifies a tendency internationally to desensitize the public to the mass-murder by Western-supported governments of whole peoples whom they find inconvenient. Often the victims of this persecution are described as or even call themselves 'communists'. Usually they would more correctly be called nationalist peasant movements against Western supported governments that are privatising and corporatising [colonising] the common and traditional land of these people and depriving them of their right to self-government. Such genocides are later 'economically' justified by an averaged rise in living standards with increased GDP that comes with the overtaking of small subsistence holdings and their adaptation to commercial agriculture and other industries. That these agricultural and industrial changes could only come about by mass dispossession and slaughter of the original land-holders is almost never acknowledged in any manner that might be meaningfully pinned on the political, private and corporate entities which ultimately profit from these despicable colonial events. Australia has a history of cultivating 'wilful blindness' to these events in our neighborhood, under the leadership of powerful government figures.
Geoffrey Taylor here draws our attention to an example of such a complex attitude in an interview with Paul Keating last year. Keating stands out as a prime minister who, along with the United States and the United Kingdom, cultivated Australia's supportive relationship with the brutal and oppressive Suharto Government in Indonesia. Candobetter Ed.
In a recent interview (24 Mb MP3 file here) on 2 November last year with the ABC's Richard Fidler, former 'Labor' Prime Minister Keating dismissed concerns for human rights and democracy in Indonesia. He claimed that figures given by economists proved that ordinary Indonesians had been lifted from poverty to prosperity by the policies of former dictator Suharto, who came to power in the coup of 1965 in which more than half a million members and supporters of the Communist Party of Indonesia (PKI) were murdered.
Keating's apologies for the Suharto dictatorship have to be read to be believed. I have not yet fully transcribed all that is of interest from the above-mentioned MP3 file, but below is some:
Richard Fidler (RF): One of the things I get from your book is that you, kind of, seem indifferent toward -- you shrug at the idea of democracy in Asia. ...
Paul Keating (PK): No, no ..
RF: You treat it like an over-rated virtue like chastity before marriage or something like that. You're going to go: Ahh!, ... We make too much fuss about the idea of ...
PK: Yeah, A lot of this came from our debate about Indonesia. Here is our largest neighbour, about two hundred and thirty million people. -- the largest, you know, five or six flying hours across the archipelago, ... -- because of what happened at Balibo in Timor, the Fairfax newspapers, especially the Sydney Morning Herald, ran this brutal campaign against Indonesia for nearly 30 years. In fact the Sydney Morning Herald editorialised in favour of a military attack by Australia on Indonesia. You can imagine it. ... And this is all because they don't share our democratic values. The fact that Suharto's New Order Government pulled two hundred and thirty million people from abject poverty and brought them to a reasonable standard of living --- In fact, the year before the economic collapse of '97/'98 the World Bank said that the declines in infant mortality and the rise in education standards, the general improvements in health and the distribution of income are greater in Indonesia than any country under study. ...
RF: But do you ...
PK: This cuts no ice, of course, with the donkeys at the Sydney Morning Herald
RF: That's, that's true, but you know, then, that Suharto was pretty much a gangster in many ways ...
PK: No, he wasn't. No, no!
RF: His whole family were into that economy in a big way ...
PK: No, no!
RF: The cars, tobacco ..
PK: No, no! You don't know that ...
RF: Clothes. They were all in on that
PK: They were
RF: I think what you're saying is that, like you have got to watch your terms. This guy down the road -- the gangster down the road isn't such a bad bloke, because he keeps the streets quiet.
PK: No, no. You've ... Let's get the argument set right right here. In the country which has got no wealth, he local people, the ..? boomies as they call them ...
The demonisation of Communism, which has increased in recent years, allows the large scale killing of Communists in countries such as Vietnam, Korea and Indonesia to be glossed over in the way Keating did or else depicted as other than the gross crimes against humanity that they in fact are.
In truth, most Communist Party members in those countries listed above had little in common with Stalin, whose terrible record had been used to so darken the name of Communism. Most would have been much more at home in the Australian Labor Party (ALP) than running Stalin's gulags. The murder of half a million PKI members would have had affected Indonesia in a fashion similar to what the murder of around 20,000-30,000 member of the ALP would have done to Australia at the same time.
The destruction of the PKI served to strategically protect the rear of the United States military as they commenced to obliterate Vietnam Laos and Cambodia with more bombs than were dropped in the Second World War, resulting in the loss of more than 3 million dead in Vietnam alone.
The scale of the crime against humanity, made possible or directly committed by the Indonesian dictators so applauded by Keating, is chilling - and this man was Prime Minister of Australia from 1991 to 1996!
 That and other estimates of 300,000 and 1,0000,000 are given on page 25 of Pretext for Mass murder (2006) by John Roosa. As so much of the mass murder was covered up by Suharto's police state, it was not possible to properly investigate the mass murder until after Suharto's resignation in 1998.
'Interview' with Paul Kelly yet more free ABC advertising for Rupert Murdoch
The Murdoch press promotion of Paul Kelly's misnamed book The March of Patriots, chronicling the Prime Ministerships of Paul Keating and the early years of John Howard's, has been supplemented, at taxpayers' expense, by Brisbane ABC local radio stations Conversations program.
See also: "Review of Naomi Klein's 'The Shock Doctrine'" of 21 Nov 07
The Murdoch press promotion of Paul Kelly's misnamed book "The March of Patriots," which chronicles the Prime Ministership of Paul Keating and the early years of John Howard's, has been supplemented, at taxpayers' expense, by Brisbane ABC local radio station's "Conversations" program.
"Conversations" is hosted by former Doug Anthony All Star Richard Fidler, who is now a Radio Presenter in Brisbane.
Tired old platitudes
The tired old platitudes that Kelly and other pro-corporate journalists have long used to sell these two discredited leaders to the Australian public -- "what you see is what you get", "a Prime Minister of conviction", etc. -- were lapped up uncritically by Richard Fidler in an astonishingly dull interview lasting almost an hour. Fidler challenged none of the 'free market' premises that Paul Kelly has used to justify the economic, social and ecological carnage wreaked on this country by Keating and Howard.
The central, supposedly controversial, thesis of Paul Kelly's book, is that today's wonderful, modern, prosperous 'free market' economy was created from a tired, outmoded, overly-regulated, protected, public-sector-dominated economy, through a common 'struggle' by these two leaders at different times.
Until now, many of us had naively assumed that both these men had been working to counter eachother's political agendas.
In reality the supposed 'struggle' amounted to these two men imposing a neo-liberal free market agenda on the Australian public with full cooperation and support from Paul Kelly and others in the Murdoch Press.
Shock doctrine techniques
The techniques used by the ex-prime ministers resemble those Naomi Klein describes in her towering work of political analysis, The Shock Doctrine of 2007. The Shock Doctrine documents cases where the neo-liberal project was imposed through trickery and deceit in apparently democratic states, rather than through outright military dictatorship. Although The Shock Doctrine does not contain any chapter on Australia, readers are still likely to gain a vastly better understanding of what happened to Australia under Keating and Howard than they will from reading The March of Patriots.
Paradoxically, the initial stages of the economic neo-liberal project began during the Whitlam years. In spite of Whitlam's many other economic nationalist policies, some manufacturing tariff barriers were reduced. The Fraser Coalition Government which followed in the late seventies and early eighties allowed greater rights to foreign concerns to buy Australian mineral wealth and companies. These policies were given a boost with Keating's sudden embrace of financial deregulation and his floating of the Australian dollar when he was Federal Treasurer, shortly after Labor won office in 1983. During the 1985 election the then opposition leader, John Howard, announced a hit list of twelve publicly-owned enterprises that would be sold off by a Coalition government if it won.
Howard lost that election, but by the time he won government in 1996, of the twelve on Howard's hit list, only Telstra remained in public hands. The other eleven, including the Commonwealth Bank, QANTAS and the national satellite company Aussat, were all disposed of in a Labor Government frenzy of privatisation.
Similar agendas - Howard and Keating
The other key plank of economic neo-liberalism implemented by Keating was the privatisation of retirement income, otherwise known as 'superannuation reform'. This was first undertaken by the Pinochet dictatorship in Chile. Not even the corrupt, cravenly pro-corporate Bush regime dared try to put that one over the American public, but the Keating 'Labor' Government did so to Australians in the late 1980's and we are all reaping the terrible whirlwind this decade with the global financial meltdown.
Howard's policies since 1996, with the possible exceptions of his attempt to break the Maritime Union in 1998, and his imposition of his so-called "Work Choices" legislation in 2005, were merely continuations of Labor's policies.
None of this would have been new to critical observers of these two leaders, so Kelly's 'revelation' that Howard and Keating had worked in office to achieve virtually the same economic and social goals is hardly news.
Even though a good many of both leaders' policies were deeply controversial and strongly opposed by many Australians - often a majority in the case of the privatisations of Government assets - Richard Fidler failed to put any of this to Kelly. Other awkward topics not raised in the inteview included:
- The numerous lies peddled by both Howard and Paul Kelly's Australian newspaper to win public acceptance for the invasion of Iraq in 2003; and
- The Australian Wheat Board (AWB) scandal in which AU$296million in bribes were paid to the very Saddam Hussein Government that John Howard would tell us in March 2003 posed such a mortal threat to world peace that we were left with no choice but to invade immediately.
One incredible assertion from Paul Kelly that Fidler accepted uncritically was that Howard's motive for taking a strong stance against boat people in the Tampa and "Children Overboard" affairs of 2001 was not electoral advantage, but rather his strong desire to maintain the integrity of Australia's borders. In fact Howard later loosened entry requirements and ramped up immigration to record high levels as the Sydney Morning Herald's economics editor reported in the story "Back-scratching at a national level" of 13 Jul 07.
The program, far from being a probing interview that Australian taxpayers should rightly expect from their ABC struck me as little more than free advertising for Paul Kelly and the Murdoch media.
Sugaring dubious medicine
Another consequence of the publication of Kelly's new book and the attendant marketing, in which the ABC is now participating, could be a normalisation in retrospect of the Keating and Howard Governments' unpleasant and undemocratic policies. Such a representation of political history could then be used to deter citizens from questioning new asset-stripping, austerity and wealth transfer programs, whether under the current Rudd Labor Government or under a new Coalition one.
See also: "Review of Naomi Klein's 'The Shock Doctrine'" of 21 Nov 07
Appendix: E-mail sent to Richard Fidler
The following e-mail was sent at 11.30PM, which would have been approximately 25 minutes into an interview lasting roughly 55 minutes.
Date: Monday 21 Sep 2009, 11:30:21 am
From: James Sinnamon
To: Richard Fidler
Paul Kelly's 'revelation' that both Keating and Howard both helped to bring Australia to what it is today is hardly news.
The interview has, so far, proven to be even more dull than #comment-235107">"Keating the Musical".
Have you read Naomi Klein's "The Shock Docrtine"?
Even though it doesn't have a chapter on Australia, it gives a much more accurate picture of what happened to this country than what Paul Kelly is giving.
A lot of us dispute that deregulation, privatisation, removal of trade union rights, etc, has been beneficial.
The GDP measures that economists use to prove that this has all been beneficial are flawed and capable of presenting massive declines in quality of life as increases. As an example, just ask yourself why at least two incomes are now necessary to buy even a modest dwelling when one was easily sufficient barely more than a generation ago.
Could you please consider questioning the economic neo-liberal premises of Kelly's glowing tribute to these two abysmal political misleaders?
This e-mail had no noticable impact on the remaining part of the interview. No reply has been received so far. If one is received it will be posted below.
What are the prospects for Labor bringing about a just society?
The Australian Labor Party, the world's oldest political political party still in existence, is a contradictory organisation. With its record in Government, at the Federal and state levels, and in opposition, led by Kevin Rudd, with an ever-diminishing number of policy positions which distinguish it from the ruling Howard Liberal Government, it is all too easy for critics to the left of Labor to dismiss it as no better than the Liberal Party as indeed the Greens, the Democrats and some parties of the far left have maintained either implicitly or explicitly.
Yet there seems to be no other path out of the political rut in which this country has become stuck since the election of Howard in 1996, except through the election of Labor.
Labor's dismal record since 1983
Since at least the early 1980's the Labor Party has been dominated by leaders who have acted to represent the same kinds of powerful vested interests that the Labor Party was originally formed to oppose, that is large corporations, financiers, property developers and land speculators.
Every Labor Government that has come to office since 1983, at both the Federal and state level has shamelessly, and often corruptly, served those interests to the detriment of its own support base, the country as a whole, and the environment.
Both Bob Hawke and Paul Keating willingly adopted the agenda of the economic neoliberals to 'reform' the Australian economy to give more wealth and power back to the Australian elite. This entailed the deregulation of the Australian economy, including the rate of exchange of the Australian dollar and the banking and finance sector, allowing greater access by foreign investors to Australian companies, land and mineral wealth, and an increase in the rate of immigration.
In 1986, the Hawke Government privatised the pension system, adopting the model of that had been conceived by neoliberal economist Milton Friedman and had been previously implemented by the Chilean military dictatorship. They failed to even consider the more equitable and efficient system which had been proposed by Professor Keith Hancock for the previous Whitlam Government.
The result has been that millions of ordinary Australians, in an increasingly casualised labour market, often having been forced to join a new scheme for each new employer, have had much of their funds flow, as commissions and annual management fees, into the pockets of the fund managers. In spite of this abysmal outcome, the Labor Party still, almost unbelievably, hold this to be a proud achievement of the Hawke/Keating years.
Almost following to the letter John Howard's script presented to the public in the 1986 elections, the Hawke and Keating Labor Governments sold nine of the twelve public enterprises on John Howard's hit list, including the Commonwealth Bank, QANTAS, and the Commonwealth Serum Laboratories. They stopped short of privatising Telstra, but they nevertheless deregulated the telecommunications sector, paving the way for the Howard Government's eventual full privatisation of Telstra.
At the state level, Labor Governments have been no better. They, too, have sold off state owned banks and insurance companies and much publicly owned land and many publicly owned buildings. Most have harmed the environment by promoting population growth and property development and supporting ecologically destructive industries including woodchipping, coal and Uranium mining and aluminium smelting.
Even at the level of local government where they should be closer to the people, Labor councillors still poorly represent many communities. Brisbane City Council, whilst having a Liberal Lord Mayor Campbell Newman elected in 2004 still has a majority of Labor Councillors. However, Brisbane residents' hopes that Labor would use its majority to curb the excesses of Newman have been repeatedly dashed.
Today, much of Brisbane resembles a war-zone as Campbell Newman realises his engineer's dream of fixing up problems, caused by population growth and past planning failures, by building a parallel transport system underneath Brisbane. Tunnel projects include the North South Bypass Tunnel (NSBT), the Northern Link and the the Airport Link. All of these are to be operated by private consortiums and their use will incur tolls. In addition, all bus movements through the CBD are to be moved underground, to leave the streets above ground free for private motor vehicles.
Most of these projects have provoked heated community opposition and groups have been formed to oppose the NSBT and the Hale Street Bridge. In spite of the overwhleming cases against all of these projects and ovewhelming oppostion from at least the affected communities, the Labor majority has given into Mayor Lord Mayor Newman on each occasion.
Why Labor can nevertheless become a vehicle for change
However, the fact remains that the Labor has drawn, and continues to draw, into its ranks, people who have the best motivations and aim to work through the Labor Party to bring about goals similar to what the Labor Party originally stood for. It would be wrong to assume, in spite of the seemingly insurmountable corrupting influences that now exist within Labor, that such elements will never again prevail.
This happened in the years of the Whitlam Labor Government and happened, more recently, albeit very briefly and tenuously, when Mark Latham became Labor Party leader.
Mark Latham's diaries published in 2005, reveal that he had, indeed, joined the Labor Party, entered Parliament and worked his way up the ranks all the way to the Federal Labor Party leadership for the most laudable aims.
To be sure, many of Latham's political ideas, including his embrace of 'dry economics' were not good. He held out Tony Blair's Labor Government in the UK, which had left intact nearly all of Margaret Thatcher's program of privatisation, emasculation of the Trade Unions and cutbacks to social spending and which had followed George Bush into the Iraq war, as the model that an Australian Labor Government should follow.
Nevertheless, in spite of this, it is clear that Latham was genuinely offended by the corrupt power of Australia's elites as well as those within the trade union movement and the Labor Party and was resolved to end this. In his diaries, he stated that his goal was to take political power in order to give it back to communities and ordinary people. He also adopted 'politically incorrect' stances including opposition to high immigration and once referred to many Australians' fixation upon the rising value of their own homes (largely caused by the increased demand for property fueled by immigration) as 'the great Australian disease'.
He was resolved to begin to drastically reduce the scale of woodchipping in Tasmania and to end Australia's involvement in the Iraq war.
Having stood for such decent democratic principles also eventually proved to be Mark Latham's undoing, but the fact that he came so close to succeeding, shows that even the Labor Party is not entirely impervious to the influence of genuinely uncorrupted progressive political forces.
If the Labor Party, with a leader demonstrating the elements of idealism and altruism shown by Whitlam and Latham were ever to form Government, then that Labor Government could indeed be the vehicle for the changes which are necessary to establish a fair and decent society and also to confront the grave environmental threats that our society and our whole planet face.
Even given the questionable record of the existing Rudd-Gillard Federal Labor leadership, it can't be entirely ruled that either or both of them may yet prove to be such leaders.
However, this seems unlikely in the current political context. If Labor is elected the two more likely scenarios are:
- a monolithic Labor Government which will govern in the interests of the wealthy as those of Keating and Hawke have done before, or
- a less monolithic Labor Government, where those opposed to pro-business policies will be prepared to take a public stance.
An anti-Howard grass roots mass movement is needed
A non-monolithic Labor Government is more likely if a popular grass-roots movement in favour of progressive change is brought into existence.
Such a mass movement should be unambiguously in favour of the election of Federal Labor as the only feasible alternative to the continued rule of John Howard's unaccountable, anti-democratic and morally bankrupt Government.
This should not preclude it from from being strongly and openly critical of Labor's poor policy decisions: support for woodchipping and the pulp mill in Tasmania, support for Uranium mining, watering down of its opposition to 'WorkChoices', support for high immigration and population growth and the abandonment of opposition to privatisation of Telstra.
Also, this should not preclude such a movement advocating a primary vote for independents or smaller parties which have better policies than those of either Labor or Liberal.
However, it must be unflinchingly clear on the need to use Australia's preferential voting system to preference Labor candidates ahead of any Liberal or National candidates. This will ensure that where those minor candidates or independents fail to win office their votes will flow to a Labor candidate.
If it argues such a case clearly and logically it need not drive voters back into the arms of the Liberal Party.
If, upon winning Government, Federal Labor maintains its current pro-business agenda, then the grass-roots movement will be in a position to ensure that disaffection with the Government will cause Labor's base of support to change its allegiance to something better, rather than to simply drift back to the Liberal Party as has happened in the past. In such circumstances, the prospect of a party such as the Greens, or else, some other party formed through the likely ensuing political struggles being able to form Government, will become more achievable.
However, this scenario is unlikely to unfold if John Howard's Government retains office in 2007.
#fn1">1. "Australia's neoliberal path" by Kenneth Davidson in Dissent Magazine isue 23 Autumn?Winter 2007.