24 March 2007


The latest political star to appear on the federal scene is Kevin Rudd. Like John Howard he is short, displays an impeccable honesty and is a shrewd tactician . He has crafted a policy that differs only in carefully selected issues from the government.

OK first my own disclosures. About three years ago I went to a MEAA (Journalist's union) meeting in Darling harbor Sydney at which KR spoke. He was witty, a great orator, and shared "in" type media jokes, concerning the gullibility of the public. Not that I felt that he felt that way, but the cynicism displayed by that crowd was quite disconcerting.
The liberal party of John Howard appears to be floundering. Following Rudd's overthrow of Beazley & election to leadership of the Australian Labour Party (ALP), there was the traditional media honeymoon period. Then Howard appeared to be gaining traction on the outing of Rudd's meetings with Brian Burke, prominent felonious ex-premier of Western Australia .

Since then Howard's team has very much let down the side. Two ministers have been sacked for breaching the newly stringent code of conduct, and issues raised by Rudd have been mishandled.

For instance:

1) Rudd and the ALP are determined to destroy Howard's industrial relations initiative. Since introduction of individual contracts, the unemployment has dropped to below 5%, and is now lower than it has been for 40 years. The ALP is currently claiming that productivity in Australia has fallen drastically, (by 4%) and all of those jobs (which reduce the unemployment rate) are being created in the booming mining industry.

The obvious response (which the governing Liberals have not exploited) is: Falling productivity proves that the IR policy is working. Falling productivity results from the IR laws which produced falling unemployment figures. To illustrate; Consider a small factory, say 25 employees, producing for a limited market. After the IR laws were enacted, the manager hired an extra employee. The factory did not produce any more goods. That extra employee was insurance against sickness or whatever. Now there are 26 employees producing exactly the same quantity of goods, so productivity has fallen by 4%.

2) Another example of Liberal party disarray is their response to Rudd's Telstra initiative. I have previously explained how the ACCC's Samuel mismanaged broadband regulation. (Basically, Samuel's sharing and pricing policy of the proposed broadband network was so strict that Telstra boss Trujillo said OK, we will use somebody else's network if we get those sharing & pricing terms, but we are not risking our shareholder's funds on such a risky, low return investment). In the meantime, John Howard had established a "future Fund", which is a fund that manages the money that will be needed to provide financing to retiring public servants over the next decades. Kevin Rudd has suggested that a suitable investment for that fund would be in a broadband network. The Government hysterically disagrees, saying that the ALP is robbing the piggy bank. That is obvious rubbish. In fact, one has to ask, if ACCC Samuel thought it was supposed to be a good enough investment for Telstra shareholders, then why isn't it a good enough investment for the future fund?

The election can be called at a few weeks notice by John Howard, but must be called before the end of this year. Since I dislike all politicians intensely, I can only hope for a hung parliament with independents holding the balance of power.

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