Thursday, May 12, 2011

More government waste -- and Gillard hasn't even got the brains to back down from it

LEADING retailers have rejected the Federal Government's digital set-top scheme for pensioners as grossly overpriced. The scheme, announced in the 2011 Federal Budget, sets aside $308 million to help pensioners switch over to digital TV.

The Federal Government plans to spend $350 per eligible household to provide the free service, which will include purchasing the hardware, installation, antenna adjustment, support and warranty services.

But sellers of electronic goods say they could complete the project for only one-sixth of the Government's projected costs, The Australian reports.

Kogan Technologies chief executive Ruslan Kogan said the Government could be delivering the set-top box to pensioners all over Australia "for much, much cheaper". "We estimated the $308 million scheme could be completed for only $50m," the online entrepreneur said. "We can charge as little as $39 for a set-top box (pre-GST). "I don't know where the Government is getting their price from, but we think they should shop around," he said.

The Australian surveyed several commercial outlets and found shopfront and online stores - Harvey Norman, Bing Lee and Kogan Technologies - sold, delivered and installed either a set-top box or digital television well below the estimated costs under the Government plan.

Master Electricians Australia chief executive Malcolm Richards said there was also a danger the plan could turn into the widely criticised pink batts scheme. "We don't need any further proof that the promise of easy government money will bring out all the shonks and shysters chasing a quick buck," he said in a statement.

Pensioners also gave the scheme the thumbs down this week. Pensioner Dawn Denman told The Australian the plan was a waste of money and a potential security risk. "I don't think they need a technician to do this . . . I don't want someone going through my home who I don't know," she said.

Ms Denman, who got a digital set-top box for Christmas, said her daughter took less than half an hour to install it. "It's nothing - it's just putting the cables in the back and using the remote control," she said.

Col Galway, a pensioner from Hervey Bay in Queensland, said he had installed two set-top boxes himself - a task that took "about 10 minutes each". "If they're talking about a $50 machine and $350 to come out and install it, I would like to get that job," he said.

But Mr Swan this week defended the plan, saying he would never apologise for supporting pensioners. He said more than 38,000 pensioners had already received new set-top boxes. "There are accredited people who not only provide the box but set it up and work with the household to make sure it works.

"This program is working well, it is of great benefit to our pensioners, who have worked hard over generations to make our economy strong and it's an important program and it's one that we strongly support."


Bureaucratic bloat continues

Treasurer Wayne Swan talked for the fourth year in a row about a tough budget, but despite the ballooning deficit, the Australian Public Service, which Kevin Rudd described in 2007 as bloated, continues to grow.

Hidden deep within Statement 6 of 2011-12 Budget Paper No 1 is data on average staffing levels in the public service, including all defence force personnel and people employed by commonwealth statutory authorities.

During the last year of the Howard government there were 248,217 full-time equivalent federal public servants across the country. In 2008-09, the first full year of the Labor government, this level increased to 250,566 public servants. A year later public service numbers increased to 258,321 and again in 2010-11 to 261,891 people. That's an extra 11,300 people in the life of the Rudd and Gillard governments so far.

The latest budget reveals that in 2011-12, when the government hopes its budget deficit will be sliced in half, the number of public servants on its payroll will grow by a further 1100 people to a grand total of 262,995 staff. It's as if the government thinks that, by some natural law, every year the size of the government has to get bigger.

The budget paper also provides a breakdown of anticipated staffing by agency, giving a crucial insight into the policy priorities of the government in the short term. While reallocations of staff across agencies affect the results, most public servants will feel nothing in net terms of the government's deficit reduction crusade.

The civilian Defence Department, including the Defence Materiel Organisation, is set for nearly 1000 new staff in 2011-12 compared with the previous year.

This may surprise many who observed the government laying the groundwork for cuts to this area. However, as revealed in The Australian last week, the announcement of 1000 jobs lost from Defence in the next four years are for intended, but yet to be filled, vacancies. The centralising of power in the hands of the Prime Minister is set to continue with more than 310 new employees in the Department of the Prime Minister and Cabinet.

The Immigration Department, which has distinguished itself recently by failing to advise its minister of a bomb in a detention centre, is expected to gain a further 285 employees. Staff lost from the Education Department will be partially offset by a new Vocational Education Regulator, with 155 new people on board.

And to tally all of this, and everything else, the Australian Bureau of Statistics will be rewarded for enduring nominal budget cuts in previous years with 200 extra staff.

The budget paper highlights some employment losses from some agencies, but these cuts are mostly more apparent than real, with staff being reclassified from one agency to another in what is the big APS merry-go-round.

This public sector growth is the smoking-gun admission of the government that all its tough talk about savage spending cuts has come to nought. The meagre sacrifices of expenditure rationalisation offered will largely be offset by spending hikes elsewhere.

What has been missed in recent weeks is that the government had no intention of endangering the new protected species of public servants working for it. In an interview on the Ten Network's Meet the Press this month, Wayne Swan said: "We do not necessarily expect any forced job losses in the public sector."

So why does the government promise so much on public service rationalisation yet deliver so little?

From a political economy perspective, the answer is straightforward. A political party wishing to gain power, or hold government, will never offend its core political constituency for fear of losing its voter base. With trade union representation in the private sector leaching away because of global competition affecting trade-exposed industries such as manufacturing, public servants represent the dominant force in the union movement. It is the interests of this constituency that Labor, a creature of the unions, must serve. Being in a minority government alliance with the Greens, who are increasingly vying with Labor for votes from public sector workers, doesn't help the cause of right-sizing the government either.

Each year leading up to the federal budget the Community and Public Sector Union has warned the government against making cuts to the public service. Indeed, before the 2007 election campaign the national secretary of the CPSU rebuked Rudd for his "intemperate language" about cutting back the public service.


More evidence of badly managed flood control dams in S.E. Qld.

The key blueprint used to control Somerset and Wivenhoe dams is set for a major overhaul as criticism mounts over the way engineers handled the January floods.

The move raises possible legal implications for flood victims and insurers seeking compensation and could lead to a mass buyback of properties in flood zones.

The Courier-Mail understands that a "significant review" of the manual used to control the dams during floods will start within weeks, pre-empting the findings of the flood inquiry. The judge heading the inquiry has already labelled the manual "a bit of a mess". It was "not set" for a worst-case weather scenario, only historical norms, The Courier-Mail has been told.

The overhaul was likely to lead to a shift in priorities away from protecting upstream farms and bridges in favour of urbanised areas downstream. The revamp will involve Seqwater, the Department of Environment and Resource Management and councils.

It is understood officials now accept that more up-to-date modelling of river levels is needed to cope better with large floods.

The dams manual was originally developed to avoid political interference and is meant to help engineers prevent flooding and safeguard the dams. But independent experts say dam managers are unduly constrained by the document and that it is based on outdated and inadequate theories.

Dam managers are obliged to follow the manual in order to avoid legal liability.

"It's a hopeless manual," veteran Brisbane environmental engineer Max Winders told The Courier-Mail. "There would be very little professional support for the terms of the manual and no support for its efficiency. "Unfortunately Seqwater didn't have a flood simulation, it wasn't used at the time of the flood. They had nothing to make decisions with."

Mr Winders said the manual, first introduced in 1980 after allegations of political interference during the 1974 flood, failed to address flood mitigation in Brisbane. He said it focused on river flows rather than the river heights that they produced.

Mr Winders, who has advised on development on flood plains across Queensland and appeared as an expert witness on the topic in numerous court cases, has made a detailed submission to the inquiry.

Queensland drainage engineer Neville Jones, in another submission to the Inquiry, argues that operators stuck to the terms of the manual but their interpretation of it caused avoidable flooding in Brisbane. "Earlier and higher releases could have and should have been undertaken," he wrote. "A warrant existed under (the manual) . . . for higher discharges to be pre-emptively initiated."

Officials defending the dam operators say the critics are using hindsight and they would have faced criticism if early releases from the dam had flooded properties and then the weather had cleared.

It is understood recommendations that emerge from the overhaul of the manual will be forwarded to the inquiry. A new manual will have to be gazetted before it goes into effect. Law firm Maurice Blackburn, which is representing the interests of flood victims at the inquiry, said it was monitoring developments.


Gillard takes aim at self-employed

Tucked away in the torrent of detail in the 2011 federal budget is a dirty deal between the Gillard government and the unions designed to shaft a growing group that unions fear: the self-employed.

In this case the gun is carried by the Assistant Treasurer, Bill Shorten, a former national secretary of the Australian Workers Union, former member of the executive of the ACTU, and former member of the board of the Labor front group GetUp. On Tuesday Shorten issued a deceptively bland press release which said, in part: "Some contractors appear to be unaware of their existing tax obligations or deliberately under-reporting their tax. The government will therefore introduce a requirement for certain businesses in the building and construction industry to report to the Australian Taxation Office annually on payments made to contractors in the industry … This will help ensure a more level playing field within the building and construction industry and improve voluntary compliance."

The new rule being introduced by Shorten will impose a grave and gratuitous administrative burden on small business operators and the self-employed. It appears to require that anyone in the construction industry who hires a contractor will have to report to the Tax Office every payment to that contractor. Every contractor, in turn, will have to report the detail of every payment they make to any other contractors.

"They are deliberately creating an administrative nightmare," said Phillips. "The Gillard government is moving to tie up contract work in so much red tape and complexity that the practical ability to be self-employed will evaporate. They want people to be employees, not self-employed."

In a separate punitive measure, the government has also targeted the smallest of small businesses: one-person operations reporting business income of less than $50,000 a year. The government is removing the 25 per cent tax offset these business operators receive. It will affect about 400,000 self-employed.

These measures follow a pattern of shoring up union power since Labor won office, as it repaid its union paymasters. The government has re-regulated the job market via the Fair Work Act. It has increased the scope of the award system. It has expanded the industrial tribunals system, setting up a new layer of bureaucracy and litigation called Fair Work Australia.

All these measures have the effect of being both job-creation retardants and inflation accelerants.


School heaters: More bungling from the NSW Education Dept.

In a bureaucracy, nobody gives a damn

AFTER decades of insisting unflued gas heaters were safe, the NSW Department of Education has installed flued heaters at Blackheath Public School - but the school had already installed reverse-cycle airconditioning.

Parents are angry the department did not reimburse the $44,000 parents helped raise to install the units a year ago.

Richard Kalina, who has campaigned against unflued gas heating and whose daughter attends Blackheath Public School, said the decision was an "appalling waste" of resources. "Blackheath now has two sets of heating," he said.

A Greens NSW MP, John Kaye, said the school found itself "in the ridiculous position of having two heating systems". But Hazelbrook Primary School, in the lower Blue Mountains, had missed out on flued heaters. "The sensible option would be to remove the flued units from Blackheath and take them down the road to Hazelbrook.

"The Labor government should never have let the situation reach the level of desperation that caused parents to resort to using their own money to buy a safe heater solution."

A spokesman for the department said the flued heaters, installed last week, were more cost-effective to operate than reverse-cycle airconditioning.

He said when the school raised the possibility of installing airconditioning in early 2009, the department recommended this be delayed until the outcome of the Woolcock Institute report on the use of unflued gas heaters in schools was known.

The report, published in the journal Environmental Health Perspectives, found respiratory illness was higher in classrooms with the heaters and levels of nitrogen dioxide and formaldehyde were "substantially increased" when they were on.

"The airconditioning was installed in April 2010, before the mid-2010 announcement, after the report's release, of flued gas heating for the 100 coldest schools, including Blackheath," the spokesman said. "While the school will not be reimbursed for installing airconditioning, this equipment can be used for cooling during the summer months."


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